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2002
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
MEDICAL INDEMNITY
BILL 2002
MEDICAL INDEMNITY (IBNR INDEMNITY)
CONTRIBUTION BILL 2002
MEDICAL INDEMNITY
(ENHANCED UMP INDEMNITY)
CONTRIBUTION BILL
2002
MEDICAL INDEMNITY (CONSEQUENTIAL
AMENDMENTS) BILL 2002
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister
for Health and Ageing,
Senator the Hon. Kay Patterson)
This package of Bills gives effect to a number of elements of the
Government’s policy on medical indemnity announced by the Prime Minister
on 23 October 2002.
The Bills together provide
for:
§ Commonwealth payments in relation to
claims forming part of the unfunded incurred but not reported (IBNR) liability
of medical defence organisations (MDOs) as at 30 June 2002;
§ Commonwealth payments in relation to part
of the cost of large claims against MDOs or medical indemnity insurers in
relation to incidents notified after 1 January
2003;
§ Subsidies to assist medical practitioners
in meeting the cost of indemnity coverage;
§ Payments by members of MDOs to the
Commonwealth to cover the cost to the Commonwealth of payments in relation to
unfunded incurred but not reported
liabilities;
§ Payments by members of United Medical
Protection Limited (UMP) to the Commonwealth to cover the cost to the
Commonwealth of any payments under the deed of indemnity between the
Commonwealth, UMP, Australasian Medical Insurance Limited (AMIL) and the
provisional liquidator of UMP/AMIL.
Those elements of the
Government’s policy relating to the prudential regulation of MDOs will be
the subject of another Bill.
MEDICAL INDEMNITY BILL 2002
Part 1 – Preliminary
This Part sets out the objects
of the legislation. It also provides for the commencement of the Bill, defines
terms used in the Bill and provides that the Bill extends to the external
Territories.
Division 1 of this Part provides for the IBNR indemnity scheme
under which the Commonwealth will make payments to MDOs which had unfunded IBNRs
as at 30 June 2002 in respect of claims relating to incidents which were part of
the MDO’s unfunded IBNR liability.
All MDOs that existed at 30
June 2002 will take part in the scheme unless the Minister, having regard to the
extent of an MDO’s unfunded IBNR exposure as at 30 June 2002, determines
that an MDO does not participate in the scheme.
An MDO or another insurer
that makes a payment in respect of a claim relating to an incident which was
part of the IBNR liability for a participating MDO may apply for a Commonwealth
payment. The proportion of the payment covered by the Commonwealth payment will
vary according to the unfunded IBNR factor set by the Minister to reflect the
proportion of a participating MDO’s IBNR liabilities which were
unfunded.
Division 2 covers the high cost claim indemnity scheme.
Under this scheme the Commonwealth will pay a proportion (set in the Bill at 50%
but subject to change by regulation) of amounts paid by MDOs or insurers in
respect of medical indemnity claims over a defined threshold (set in the Bill at
$2 million but subject to change by regulation).
Division 3
provides for the administration of both indemnity schemes, including how
applications are made, payments by the HIC, requirements on persons to provide
information and keep records, and repayment arrangements.
Division 4
provides that the Minister may formulate a scheme to assist certain medical
practitioners in meeting the costs of purchasing medical
indemnity.
Division 5 covers offences against the Part, and
Division 6 appropriates the Consolidated Revenue Fund to make payments
under the Part.
Division 7 covers existing reinsurance contract
and is intended to assist MDOs to get both the full benefit of their reinsurance
contracts and the full benefit of contributions from the Commonwealth towards
the cost of claims covered by the IBNR scheme and the high cost claims
scheme.
Part 3 – Contributions towards the cost of providing
indemnities
Division 1 sets out who is liable to pay an IBNR
indemnity contribution to cover the costs of Commonwealth payments under
Division 1 of Part 1. Broadly, all members of a participating MDO as at 30 June
2000 are required to make the contribution unless they have died, retired before
31 December 2000, were students at 30 June 2000, or have purchased alternative
insurance covering them for incidents covered by the IBNR indemnity scheme.
The rate of contribution is to be based on the indemnity premium or
subscription paid by the member for a full year that began in the 2000-01
financial year. It will be varied according to the results of an annual
reassessment of the IBNR liability of each participating MDO, but the amount
paid by a member will never increase over the amount paid in 2003-04.
The
indemnity contribution is imposed as a tax through the Medical Indemnity
(IBNR Indemnity) Contribution Bill 2002.
Division 2 sets out
that members of UMP as at 1 July 2002 are liable to pay a contribution to cover
the cost of the Commonwealth guarantee to the Provisional Liquidator of UMP/AMIL
covering the period 1 July 2002 to 31 December 2003
The contribution
is imposed as a tax through the Medical Indemnity (Enhanced UMP Indemnity)
Contribution Bill 2002.
Division 3 provides for the
administration of the contributions, including when payments must be made, and
options for members to defer payment for twelve months, pay in instalments or
make a lump sum payment. It also covers refunds, recoveries, and information
provision arrangements.
This Part provides for the administration of the Bill by the HIC the
making of regulations under the Bill. It also provides imposes secrecy
requirements on officers administering the legislation, and provides that the
Bill does not extend to State insurance within a State.
The Commonwealth has already expensed the assumption of the IBNR
liabilities in the Budget outcome for 2001-02. The rate at which this expense
will be met as cash payments is unknown, as is the rate of collections of
contributions under Part 3 and the contribution legislation, as these depend on
decisions on which MDOs will participate in the IBNR indemnity
scheme.
The estimated annual expense in a full year under the high cost
claims scheme and the subsidy arrangements are around $19 million and $35
million a year respectively, although both these estimates will be affected by
the progress and nature of State tort law reform.
Medical indemnity cover has been offered to doctors in Australia for over
100 years through medical defence organisations (MDOs), which are mutual
associations of doctors. The indemnity cover provided by MDOs is discretionary
rather than through a contract of insurance, and the MDOs are thus not subject
to regulation under the Commonwealth’s insurance legislation.
There
are currently seven MDOs operating in Australia. The largest of these is United
Medical Protection (UMP) which covers over 60 per cent of the medical profession
of Australia – about 30,000 members.
Two recent developments in the medical
indemnity sector were placing in jeopardy the continued provision of medical
services in the community:
• The application in April 2002 by
United Medical Protection to be placed under provisional liquidation,
potentially leading to 60% of doctors in Australia not having indemnity
cover;
• Sustained large increases in subscriptions to medical
defence organisations to the point that some doctors were paying over a third of
their incomes for indemnity cover, and deciding to leave the profession
altogether or cease certain high risk procedures such as
deliveries.
There are also two systemic issues affecting the medical
indemnity sector. The first is that a number of MDOs have not made full
provision for the liabilities arising from incurred but not reported (IBNR)
claims. This under-provisioning is a source of potential financial instability
for the MDOs concerned.
In the absence of Government action, these MDOs
would have had an excess of liabilities over assets, and would have had to raise
capital from their members over several years through successive
“calls” on members – arrangements under which members pay an
additional year’s subscription.
The second systemic issue is that
the uncertainty around large claims had led to commercial insurers either
deciding not to enter the market or else deciding to leave the market, thus
reducing competition.
There were essentially two options open to the
Government: take no action, and let market forces determine a solution; or
intervene to address the IBNR issue, reduce uncertainty around large claims, and
ensure that doctors could have access to affordable indemnity cover.
Not
taking action in relation to UMP would lead to large numbers of doctors covered
by UMP becoming uninsured and consequently withdrawing from providing medical
services. It would also result in many persons with successful claims against
doctors arising from past incidents arising in the course of medical practice
being unable to recover damages except from the doctor’s own
assets.
A continued increase in indemnity costs for specialists such as
obstetricians and neurosurgeons and for procedural GPs in rural areas would lead
to doctors withdrawing from these areas of practice, placing at risk patients
requiring these medical services.
These outcomes are not compatible with
the Government’s commitment to the provision of medical services in the
community through Medicare.
The Government’s main objective is to support the continued
provision of medical services to the community by ensuring that doctors can have
access to affordable indemnity cover. It also wishes to address the problem of
financial instability arising from unfunded IBNRs.
The Government proposes to:
• meet the cost as it emerges of
claims forming part of the IBNRs for those MDOs that had not made full provision
for these claims at 30 June 2002, and recovering the costs of the payments it
will make from doctors who were members of relevant MDOs;
• meet
fifty per cent of the cost above $2 million to the limit of payments by an MDO
or insurer of medical indemnity awards or settlements arising from claims
notified after 1 January 2003;
• subsidise the costs of
medical indemnity for particular groups of doctors; and
• recover
the costs of payments if they arise under the extended guarantee to the
Provisional Liquidator of UMP. (Immediately after UMP went into provisional
liquidation the Government gave a claims incurred guarantee to the Provisional
Liquidator for the period 29 April to 30 June 2002. It subsequently extended
the guarantee on a claims made basis from 1 July to 31 December 2002, and has
now extended the guarantee on the same basis for a further twelve months,
subject to approval by the NSW Supreme Court.)
Affected parties include doctors, MDOs, patients with claims against
doctors and patients more generally, and the Government.
Meeting the cost of unfunded IBNRs as they emerge will remove the
liability in relation to these costs from the balance sheets of MDOs that have
not fully provided for these liabilities and ensure that these claims will be
met as they emerge.
It is estimated that UMP has unfunded IBNRs of $460
million, and in the absence of the proposed legislation would have proceeded to
full liquidation, leaving 60% of the medical workforce across Australia
uninsured for past events.
Recovering the cost of IBNR payments from
doctors will affect doctors’ incomes for a number of years, depending
on the extent of the unfunded IBNR of the MDO they belong to. The legislation
sets a cap on payments by doctors of 50% of the premium they paid in respect of
a full year that began during the 2000-01 financial year.
The Government
intends that in net present value terms the membership of each affected MDO will
be no better off or no worse off under the IBNR arrangements: the legislation
simply provides for payments by doctors to be spread over a longer time frame
and be more immediately affordable. (The proposal to meet fifty per cent of the
cost of claims over $2 million will reduce the amount of the IBNR liability
to some extent for MDOs facing such claims, and means that doctors who are
members of those MDOs will be better off.)
Meeting fifty per cent of
the cost above $2 million of arising from claims notified after 1 January
2003 is intended to address the considerable uncertainty around very large
settlements. A number of general insurers have indicated that the uncertainty
around very large claims is a substantial disincentive to market entry.
Co-insurance by the Government of these claims will remove an obstacle to market
entry by general insurers and thus promote competition in the medical indemnity
sector. It will also exert downwards pressure on the costs of medical indemnity
cover to doctors.
Subsidising the cost of medical indemnity cover
for groups of doctors allows the Government to address affordability issues
directly.
Recovering the costs of payments under the extended
guarantee to the Provisional Liquidator of UMP if any arise will impose a
cost on doctors who are UMP members. However, the UMP membership will have
benefited substantially from the guarantee. Without the guarantee the
Provisional Liquidator would not have been able to renew memberships as they
expired. Nor would UMP have been able to make any payments in relation to
defending cases or settled claims and judgments, and doctors would have been
required to bear these costs from their own pockets as they emerged.
In
addition to benefiting MDOs and doctors, patients will also benefit from the
legislation. Patients will continue to have access to doctors in private
practice who might otherwise have decided to withdraw from the profession or
from providing particular high-risk procedures. Patients with claims against
doctors which form part of the IBNR tail can now be assured that they will
receive damages if their claim is successful, even if the MDO has not fully
funded its IBNR liability.
The Government has consulted extensively with the MDO sector and the
Insurance Council of Australia, consumer groups, and a range of doctor groups
including the Australian Medical Association, the Rural Doctors’
Association of Australia, the Neurosurgical Society of Australasia, the National
Association of Specialist Obstetricians and Gynaecologists and a number of
medical Colleges in developing the policy reflected in the
legislation.
Some doctor groups are arguing that they should not be
required to pay for the IBNR liability until tort law reform measures have been
fully implemented in all States and Territories. While tort law reform may
reduce the IBNR liability to some extent, it will not eliminate it, and MDOs
with unfunded IBNRs will still be subject to undesirable financial instability.
Other doctor groups, consumers and the MDO sector generally support the
policy.
The proposed measures address the potential impact of IBNRs on the
viability of
funds, and will also improve the affordability of indemnity
cover and encourage doctors to continue to provide medical services in the
community.
The Health Insurance Commission will administer the legislation.
Payments in relation to claims forming part of the unfunded IBNR tail will begin
from 1 January 2003, and payments in relation to claims over $2 million notified
after that date will begin as soon as claims are settled or tried. MDOs will be
required to provide details of relevant claims to the HIC for reimbursement, but
otherwise are required to continue to act in the ordinary course of
business.
Payments by doctors to meet the cost of the IBNR payments will
begin from the 2003-04 financial year. The legislation requires an annual
reassessment of the IBNR of each participating MDO to inform a decision whether
to require continued payments by doctors.
The Government has undertaken
to keep the medical indemnity sector under review. It has also undertaken to
ask the ACCC to monitor the costs of medical indemnity cover.
Clause 1 Short title
This clause sets out the short title
of the Bill
Clause 2 Commencement
This clause provides that
the Bill commences, or is taken to commence on 1 January 2003.
Subclause (1) states that an object of the Bill is to contribute
to the availability of medical services in Australia by providing assistance to
support access by medical practitioners to medical indemnity
arrangements.
Subclause (2) provides that the assistance takes the
form of meeting part of the costs of large settlements or awards relating to
incidents notified after 1 January 2003; providing subsidies to help some
medical practitioners purchase indemnity; and meeting the cost of certain
incurred but not reported (IBNR) liabilities of those medical defence
organisations with unfunded liabilities as at 30 June 2002.
Subclause
(3) states that the Commonwealth is also providing assistance to members and
former members of UMP under the Medical Indemnity Agreement referred to in the
Medical Indemnity Agreement (Financial Assistance – Binding
Commonwealth Obligations) Bill 2002.
Subclause (4) states
that another object of the Bill (together with the other Bills in the package)
is to allow the Commonwealth to recover the costs of the assistance relating to
IBNRs from persons who were members of the relevant MDOs as at 30 June 2000 and
the costs of certain parts of assistance provided under the Medical Indemnity
Agreement.
Clause 4 Definitions
This clause defines terms
used in the Bill, or indicates where else in the Bill terms are
defined.
Clause 5 Medical Defence Organisation (MDO)
This
clause defines a medical defence organisation (MDO) in one of three
ways.
Subclause (2) defines an MDO as (subject to regulations
under subclause (5)) a body corporate which existed on 30 June 2002 and in the
ordinary course of its business indemnifies members in respect of incidents that
occur in the course of their medical practice.
Subclause (3)
provides that (subject to regulations under subclause (5)) the seven
organisations currently operating as MDOs are MDOs for the purposes of the
Bill.
Subclause (4) and subclause (5) provide that the
regulations may provide for specified bodies corporate to be and not to be MDOs
for the purpose of the Bill.
Clause 6 Member of an MDO
This
clause provides that a person is a member of an MDO under the constitution of an
MDO, no matter how their membership is described.
Clause 7
Incident-occurring based cover
This clause defines incident-occurring
based cover with an MDO on 30 June 2002 as an arrangement between a person and
an MDO in existence on 30 June 2002 under which the MDO in the ordinary course
of its business would have been able to indemnify the person in relation to an
incident even if the person was no longer a member of the MDO when the claim was
made.
Subclause (2) provides that the definition is still
satisfied even if the period during which a claim can be made is limited (as it
is for arrangements known as extended reporting benefit
cover).
Subclause (3) clarifies that arrangements may be
incident-based occurring cover even if they are called claims incurred cover,
extended reporting benefit cover, or death, disability or retirement
cover.
Clause 8 IBNR exposure of an MDO
This clause defines
the IBNR exposure of an MDO at a particular time as the amount that the MDO is
likely to have to pay in respect of claims relating to incidents occurring
before 30 June 2002 covered by incident-occurring based cover, in the
course of the practice of a medical profession by a person who was a member of
the MDO, which had not been notified to the MDO at 30 June 2002.
Clause 9 External Territories
This clause provides that
the Bill extends to the external Territories.
Part 2 -
Commonwealth payments
Division 1 - The IBNR (incurred but
not reported) indemnity scheme
Clause 10 Guide to the IBNR
indemnity provisions
This clause sets out where in the Division
particular provisions may be found.
Clause 11 Participating
MDO
Subclause (1) clause provides that an MDO is a
participating MDO under the Bill unless the MDO was not in existence on 30 June
2002 or the Minister determines (under Clause 12) that the MDO is not a
participating MDO.
Subclause (2) provides that if the Minister
determines the MDO is not a participating MDO the MDO is taken never to have
been a participating MDO.
Clause 12 Minister may determine that MDO
not a participating MDO
Subclause (1) provides that the
Minister may make a determination that an MDO is not a participating MDO.
Subclause (2) requires the Minister in making a determination to
have regard to whether the MDO had an unfunded IBNR exposure on 30 June 2002
(taking into account the consolidated financial position of the MDO and any
controlled entities) and any other matter the Minister considers
relevant.
Subclause (3) requires the Minister before making a
determination to consider a report from the Actuary on the
matter.
Subclause (4) requires the Minister to give a copy of the
determination to the MDO within 28 days after the day it is
made.
Subclause (5) provides that a determination under subclause
(1) is a disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
Clause 13 Process for determining
whether a determination should be made under
section 12
Subclauses (1) and (2) require the
Actuary, taking into account information obtained by the HIC from the MDO, to
provide the Minister with a written report of whether the Actuary considered
that the MDO had an unfunded IBNR exposure on 30 June 2002.
Subclauses
(3), (4), (5), and (6) provide for the HIC, if it believes on
reasonable grounds that the MDO is capable of providing relevant information, to
seek relevant information from the MDO under a written notice (specifying a day
at least 28 days after the notice is given to comply and stating that a failure
to comply with the request is an offence) and give that information to the
Actuary. The notice may require the information to be verified by statutory
declaration.
Clause 14 Incidents covered by the IBNR indemnity
scheme
This clause provides that an incident is covered by the scheme
if it took place before 30 June 2002 in the course of the practice of a medical
profession by a person who was a member of a participating MDO at the time of
the incident and also had incident-occurring based cover with the MDO on 30 June
2002, but was not notified to the MDO before 30 June 2002.
Clause 15
IBNR indemnity may be payable under either section 16 or 17
This
clause provides that the Commonwealth may make a payment under either clause 16
or clause 17, may make a payment to an MDO or insurer under external
administration, and precludes an MDO or insurer that has received a payment
under clause 17 cannot receive a payment under clause 16 in relation to the
same claim.
Clause 16 IBNR indemnity for payment made by MDO or
insurer
Subclause (1) provides that an IBNR indemnity is
payable if:
paragraph (a): the MDO or insurer makes a payment in
respect of a claim against or by a person (the practitioner);
and
paragraph (b): the claim relates to an incident covered by the
IBNR scheme (or a series of incidents, one of which is covered by the scheme);
and
paragraph (c): the practitioner was a member of a
participating MDO when the incident occurred; and
paragraph
(d): if an MDO makes the payment, it does so consistent with it
constitution and in the ordinary course of business; and
paragraphs
(e): if an insurer makes the payment, it does so consistent with the
terms of the insurance contract and in the ordinary course of its business;
and
paragraph (f): the MDO or insurer applies to the HIC under
clause 36.
Subclause (2) expressly provides that the indemnity
payable is subject to the provisions of subclauses (5) and (6) and 15(3) and
clauses 19 and 20.
Subclause (3) clarifies that the MDO indemnity
is payable to the MDO or insurer regardless of the basis on which the payment is
made, even if it is made under claims-made cover.
Subclause (4)
clarifies that the MDO indemnity is still available if the MDO making the
payment is not a participating MDO.
Subclause (6) provides that if the indemnity is not paid to a
participating MDO, the indemnity is only payable if the participating MDO could
have made the payment in relation to he claim under its constitution and in the
ordinary course of its business under incident-occurring cover held by the
defendant on 30 June 2002.
Clause 17 IBNR indemnity for MDO or
insurer in external administration
This clause is based on Clause
16, but sets out the special arrangements for IBNR indemnity payments to MDOs or
insurers in external administration.
It adds to subclause 17(1) at
paragraph (d) the test that the liability of the MDO or insurer must be (or
would be) provable in winding up. It also adds subclause (7) providing that the
IBNR indemnity is paid on trust for the benefit for the person to whom the MDO
or insurer is liable.
Clause 18 Clarification of circumstances in
which IBNR indemnity payable
This clause provides that an IBNR
indemnity is still payable even if the MDO or insurer is covered by reinsurance
for the payment; the incident took place outside Australia; or the payment was
made before the commencement of the Act.
This reflects the
Government’s intent to relieve MDOs that have not fully funded their IBNRs
of the liability that has not been funded, even if the liability is covered by
reinsurance, relates to events outside Australia or is discharged between 30
June 2002 and the commencement of the Act.
Clause 19
Exceptions
This clause provides that an IBNR indemnity is not
payable:
paragraph (a): for incidents occurring in the course of
treating a public patient in a public hospital. (The State and Territory
Governments generally provide an indemnity in respect of such
incidents.);
paragraph (b): if the HIC has determined under clause
53 that the person against whom the claim is made had comprehensive insurance
cover for all incidents covered by the INBR indemnity
scheme;
paragraph (c): if the payment is from one insurer to
another; or
paragraph (d): if the payment is prescribed by
regulations.
Clause 20 Payment partly related to treatment of public
patient in public hospital
This clause provides that if an MDO or
insurer makes or is liable to make a payment in relation to a series of related
incidents some of which occurred in the course of treating a public patient in a
public hospital, the payment is to be disregarded to the extent to which it
relates to or is reasonably attributable to the incident or incidents that
occurred in the course of treating a public patient in a public hospital. Any
amount paid or payable to the MDO or insurer in relation to the payment is also
to be disregarded to the extent to which it relates to or is reasonably
attributable to the incident or incidents that occurred in the course of
treating a public patient in a public hospital.
Clause 21 Amount of
the IBNR indemnity
This clause provides that the amount payable by
the Commonwealth is worked out by applying the relevant participating MDO's
unfunded IBNR factor (as determined under clause 22) to the adjusted amount
paid by the MDO or insurer.
Subclause (2) defines the adjusted
amount as the amount paid by the MDO or insurer less any amounts paid, or
payable and quantifiable at the time the IBNR indemnity is determined, to the
MDO or insurer in respect of the payment it makes.
Subclause (3)
provides that amounts to be deducted include any high cost claim indemnity
payable under the Bill, any amount payable under a right of subrogation, and any
amount prescribed by the regulations.
Subclause (4) provides that
amounts not to be deducted include insurer to insurer payments and any amount
prescribed by the regulations.
Clause 22 Minister to determine
unfunded IBNR factor for a participating MDO
Subclause (1)
provides that the unfunded IBNR factor for a participating MDO is 0 unless
the Minister has determined in writing another factor, which must be between 0
and 1.
Subclause (2) provides that the Minister may not vary or
revoke a determination made under subclause (1).
Subclause (3)
requires the Minister in making a determination to have regard to the extent
to which the MDO on 30 June 2002 had insufficient readily available assets to
cover its IBNR exposure and any other matters the Minister considers relevant.
In making a determination the Minister is to have regard to the consolidated
financial position of the MDO and any controlled entities.
Subclause
(4) requires the Minister before making a determination to consider a report
from the Actuary on the matter.
Subclause (5) requires the
Minister to give a copy of the determination to the MDO within 28 days after the
day it is made.
Subclause (6) provides that a determination under
subclause (1) is a disallowable instrument for the purposes of section 46A of
the Acts Interpretation Act 1901.
Clause 23 Process for
determining unfunded IBNR factor under section 22
Subclauses (1)
and (2) require the Actuary, taking into account information obtained
by the HIC from the MDO, to provide the Minister with a written report on what
the Actuary considers should be set as the unfunded IBNR factor for the
particpating MDO.
Subclauses (3), (4), (5), and (6)
provide for the HIC, if it believes on reasonable grounds that the MDO is
capable of providing relevant information, to seek relevant information from the
MDO under a written notice (specifying a day at least 28 days after the notice
is given to comply and stating that a failure to comply with the request is an
offence) and give that information to the Actuary. The notice may require the
information to be verified by statutory declaration.
Clause 24
Recovery if certain amounts paid to MDO or insurer after IBNR indemnity
paid
This clause provides that if an amount (other than an insurer to
insurer payment) is paid to the MDO or insurer in relation to a payment for
which a Commonwealth indemnity payment was made, the MDO or insurer must repay
to the Commonwealth the amount of the payment received multiplied by the
relevant participating MDO’s unfunded IBNR factor.
Subclauses
(4) and (5) provide that the amount to be repaid is a debt due to the
Commonwealth and may be recovered by action by the HIC in a court of competent
jurisdiction, by deduction from another indemnity amount payable to the MDO or
insurer, or by action under clause 42. The amount recovered must not exceed the
amount overpaid.
Clause 25 MDO or insurer to inform HIC of certain
amounts
This clause provides that if a payment of a type set out in
clause 24 is made to an MDO or insurer the MDO or insurer must notify the HIC in
writing within 28 days of the payment.
Clause 26 HIC to notify MDO or
insurer of repayable amount
This clause provides for the HIC to
notify the MDO or insurer of the repayable amount under clause 24, the date by
which it must be repaid (being at least 28 days after the notice is given) and
the late payment penalties under clause 27.
Clause 27 Penalty
imposed if an amount is repaid late
Subclauses (1) and
(2) impose a late payment penalty calculated at the prescribed rate of
interest on any amount repayable under clause 24 and not repaid by the day
required under clause 26.
Subclause (3) allows the HIC to remit a
late payment penalty in whole or in part, and subclause (4) provides for
a review by the AAT of a decision by the HIC not to remit a late payment penalty
or to remit only part of a late payment penalty.
Division 2 - High
cost claim indemnity scheme
Clause 28 Guide to the high cost
claim indemnity provisions
This clause sets out where in the Division
particular provisions may be found.
Clause 29 High cost claim
threshold
This clause provides that the high cost claims threshold is
$2 million or such other amount as is prescribed by regulations, and that
regulations specifying an amount of more than $2 million must give at least
12 months notice.
Clause 30 Circumstances in which high cost claim
indemnity payable
Subclause (1) provides that (subject to
clause 31) a high cost claim indemnity is payable to an MDO or
insurer:
in respect of a claim arising from an incident occurring in
Australia (or in an external Territory) in the course of the practice by a
person (the practitioner) of a medical profession notified to the MDO or insurer
after 1 January 2003 and before the date prescribed in regulations as the end of
the scheme (paragraphs (a) to (d)); and
the MDO or insurer
has a qualifying payment (as defined in subclause (2)) and the amount of the
qualifying payment or the sum of the qualifying payments exceeds the high cost
claim threshold set under clause 29 (paragraphs (e) and
(f).
The claim or incident may have been made or occurred before
the commencement of the Bill.
Subclause (2) provides that an MDO
or insurer has a qualifying payment if:
paragraph (a): it pays an
amount in relation to the claim or is liable to pay an amount under a written
agreement or court order or judgment not subject to appeal, or if it is under
external administration would be liable to pay a provable amount;
and
paragraph (b): the MDO or insurer pays or is liable to pay
under an insurance contract or other indemnity arrangement with the
practitioner; and
paragraph (c): the MDO or insurer pays or is
liable to pay the amount in the ordinary course of business, or if it is under
external administration would be able to pay the amount in the ordinary course
of business if it were not under external administration.
Subclause
(3) provides that regulations prescribing the date for the end of the scheme
must give at least 12 months notice.
Subclause (4) sets out the
circumstances in which a judgment or order is subject to
appeal.
Subclause (5) provides that indemnity amounts paid to an
MDO or insurer under external administration are paid on trust for the benefit
of the person the MDO or insurer is liable to pay.
Clause 31
Aggregating amounts paid or payable by an MDO and an insurer
This
clause provides that if separate amounts are paid in relation to a claim by an
insurer and an MDO they are taken to have been paid by an MDO for the purpose of
calculating the high cost claims indemnity if the insurer elects in writing to
have an amount it pays treated in this way.
Clause 32
Exceptions
This clause provides that an indemnity is not payable in
relation to incidents occurring in the course of treating a public patient in a
public hospital, or in relation to a claim prescribed in regulations or in
relation to an incident prescribed in regulations.
Clause 33 Payment
partly related to treatment of public patient in public hospital
This
clause provides that if an MDO or insurer makes or is liable to make a payment
in relation to a series of related incidents some of which occurred in the
course of treating a public patient in a public hospital, the payment is to be
disregarded to the extent to which it relates to or is reasonably attributable
to the incident or incidents that occurred in the course of treating a public
patient in a public hospital.
Clause 34 Amount of high cost claim
indemnity
This clause sets the amount of the high cost claim
indemnity as 50% (or such other percentage as is prescribed by regulations) of
the amount by which the qualifying payment of an MDO or insurer (or the sum of
qualifying payments) exceed the high cost claims threshold.
Subclause
(2) provides that regulation lowering the percentage or increasing the
threshold must give at least 12 months notice of the change.
Division
3 - Administration of the indemnity schemes
Clause 35 Guide to
the Division
This clause sets out where in the Division particular
provisions may be found.
Clause 36 Applications for an indemnity
scheme payment
This clause provides that an application by an MDO or
insurer for a Commonwealth payment must be made after the unfunded IBNR factor
for the relevant participating MDO has been determined by the Minister under
clause 22. The application must be in writing using a form approved by the HIC
and accompanied by documents and other information required by the
form.
Clause 37 Payment date for indemnity scheme
payment
This clause requires the HIC to make a payment that is
payable to an MDO or insurer before the end of the month of the year that
follows the month in which the MDO or insurer applied for the payment or, if the
HIC requested information from a person under clause 38, the end of the month of
the year that follows the month in which the information in the requests is
provided to the HIC.
Clause 38 HIC may request
information
This clause provides that if the HIC believes on
reasonable grounds that a person is capable of giving information relevant to
determining whether a Commonwealth payment is due, and if so how much, it may
request the person to provide the information (including records or copies of
records maintained under clause 39 or 40). The request must be in writing, state
what information is required, specify a day at least 28 days after the notice is
given to comply and state that a failure to comply with the request is an
offence. The notice may require the information to be verified by statutory
declaration.
Clause 39 MDOs and insurers to keep relevant
records
This clause requires an MDO or insurer that applies for a
payment under clause 36 to maintain relevant records, including on matters
determined by the HIC.
Subclause (2) requires the records to be
maintained for five years after which ever is the later of the day on which the
records were made or the day this legislation commences.
Subclause (3)
provides that a determination by the HIC must be published in the Gazette
at least 14 days before the determination is to take
effect.
Subclause (4) states that the clause is not to have
required a person to do anything before the commencement of the
Bill.
Clause 40 Participating MDOs to keep additional
records
This clause requires a participating MDO to keep records
relevant to determining who the participating members of the MDO are and what
its IBNR exposure is, and any other matter determined by the
HIC.
Subclause (2) requires the records to be maintained for five
years after which ever is the later of the day on which the records were made on
the day this legislation commences.
Subclause (3) provides that a determination by the HIC must be
published in the Gazette at least 14 days before the determination is to
take effect.
Subclause (4) states that the clause is not to have
required a person to do anything before the commencement of the Bill.
This clause defines an amount overpaid as either an amount paid by way of
indemnity to an MDO or an insurer when an indemnity was not payable, or an
amount paid that was greater than the indemnity that was payable, and provides
that the amount overpaid is a debt due to the Commonwealth.
Subclause
(4) provides that the amount overpaid may be recovered by action against the
MDO or insurer in a court of competent jurisdiction, by deduction from the
amount of another Commonwealth payment to the MDO or insurer under the
legislation or under clause 42. It also states that the amount recovered
must not exceed the amount overpaid.
Clause 42 HIC may collect money
from a person who owes money to a person
This clause provides for the
recovery of a debt to the Commonwealth under clause 41 through garnishee
action.
Subclause (2) provides for the HIC to direct a third party
who owes or may owe money to an MDO or insurer to pay some or all of the money
to the Commonwealth. The HIC must also provide a copy of the direction to the
MDO or insurer.
Subclause (3) provides that the direction cannot
require an amount to be paid to the Commonwealth before it becomes owing to the
MDO or insurer.
Subclauses (4), (5) and (6) provide
that it is an offence of strict liability for the third party to fail to comply
with the direction unless they comply with the direction so far as they are able
to.
Subclause (7) provides that a court may order a person
convicted of an offence under subclause (4) to pay the Commonwealth an amount up
to the amount involved in the failure to comply as well as imposing a
penalty.
Subclause (8) indemnifies the third party for any payment
made under the clause.
Subclauses (9) and (10) require the
HIC to give immediate notice to the third party if the debt due to the
Commonwealth is fully or partly discharged before the third party has made a
payment. If the debt is partly discharged, the HIC must vary the direction
under subclause (2).
Subclause (11) defines the circumstances
in which a third party is taken to owe money to an MDO or insurer.
This clause provides that the Minister may formulate a scheme for making
payments to medical practitioners to assist them in meeting the costs of
purchasing medical indemnity. The scheme is a disallowable instrument for the
purposes of section 46A of the Acts Interpretation Act 1901.
This clause provides that if the HIC believes on reasonable grounds that
a person is capable of giving information relevant to determining whether a
subsidy payment is due to a practitioner under the scheme in clause 43, and if
so how much, it may request the person to provide the information. The request
must be in writing, state what information is required, specify a day at least
28 days after the notice is given to comply and state that a failure to comply
with the request is an offence. The notice may require the information to be
verified by statutory declaration.
This clause provides that a person who fails to comply with a request
under subclauses 13(3), 23(3), 38(1) or 44(1) commits an offence of strict
liability. A person is excused from complying with the request if to do so
would tend to incriminate them or expose them to a penalty.
This clause provides that a person who fails to notify the HIC within a
particular period under clause 25 commits an offence of strict
liability.
This clause provides that a person who fails to keep and maintain records
as required by clauses 39 or 40 commits an offence of strict
liability.
Division 6 – Finance
Clause 48
Appropriation
This clause provides that the Consolidated Revenue Fund
is appropriated for the purpose of paying IBNR indemnities under Division 1,
high cost claim indemnities under Division 2, and premium subsidies under
Division 4 of Part 2.
Clause 49 Indemnity scheme payments disregarded for purposes of
reinsurance contracts
Subclause (1) provides that a contract
of insurance between two insurers governed by the laws of a State or Territory
has effect as if the contract provided that indemnity payments and MDOs’
and insurers’ rights to indemnity payments were to be disregarded for the
purposes of the contract, and in particular in working out amounts payable under
the contract by the insurer providing the insurance.
Subclause (2)
provides that subclause (1) applies to a contract entered into on or after
the commencement of the Bill.
Subclause (3) provides that
subclause (1) applies to a contract entered into before the commencement of the
Bill.
Division 1 – IBNR (incurred but not reported) indemnity
contribution
This clause sets out where in the Division particular provisions may be
found.
This clause provides that a person is liable to pay the IBNR indemnity
contribution for a financial year that is a contribution year if they are a
participating member of a participating MDO for which the financial year is a
contribution year, were ordinarily resident in Australia or an external
Territory on 30 June 2000, and are not exempt under clause 52.
This clause provides that persons may be exempted from the
contribution.
Subclause (2) sets out the circumstances in which
persons are exempt from the IBNR indemnity contribution for a contribution year,
including that:
paragraph (a): the person died before the
imposition day in that contribution year;
paragraph (b): the
person has not practised a medical profession in Australia for reward since 31
December 2001;
paragraph (c): the person’s medical income
for the 2001-02 financial year and the financial year before the contribution
year were both less than $5,000;
paragraph (d): the person was
not a medical practitioner or health professional at any time before 30 June
2000 (that is to say, they were a student) and is not a person specified in
regulations made for the purpose of this paragraph;
paragraph
(e): the person made a lump sum under clause 64 before the contribution
day;
paragraph (f): the HIC has determined under clause 53 that
the person has comprehensive insurance cover for all incidents covered by the
IBNR indemnity scheme.
Subclause (3) defines a person’s
medical income for the purpose of paragraph (2)(c) as either the sum of medicare
benefits payable in respect of professional services rendered by or on behalf of
the person, in the case of a medical practitioner; or the sum of the amounts
payable in respect of health care related services provided by or on behalf of
the person, in the case of a health professional.
Subclauses (4)
and (5) provides that regulations may provide that a person is exempt
from the IBNR indemnity contribution either generally or for a particular
contribution year of a participating MDO.
This clause provides that the HIC may determine in writing that a person
has comprehensive cover for all incidents covered by the IBNR indemnity scheme
if satisfied:
paragraphs 2(a) and 2(b): that the person on
30 June 2002 has an insurance contract or contracts that indemnified them in
respect of all incidents covered by the IBNR indemnity scheme;
and
paragraph 2(c): that the insurer or insurers were authorised
to carry on insurance business in Australia under the Insurance Act 1973
or were approved by the HIC for the purpose of this paragraph, and were not
a related body corporate of a particpating MDO; and
paragraph
2(d): that the insurer or insurers will continue to remain liable to
indemnify the person without any further premium payment.
Clause 54
Annual subscription for base year
Subclause (1) notes that
under the Medical Indemnity (IBNR Indemnity) Contribution Bill 2002 the
indemnity contribution imposed on a participating member of a participating MDO
depends on the amount of the member's annual subscription for the base
year.
Subclause (2) excludes from the member's annual subscription
for the base year fees paid for joining or rejoining an MDO, amounts paid in
response to a call, and other prescribed amounts.
Subclause (3)
defines the base year for a member. It provides that if an amount was payable
by a member for membership of a participating MDO for a full year that began
during the 2000-01 financial year, that full year is the base year. If no such
amount was payable in the 2000-01 financial year, then the base year is the most
recent preceding full year for which an amount was payable. If no such amount
was payable, then the base year is taken to be the most recent period that
started before 1 July 2000 and for which an amount was payable by the member for
membership of the participating MDO.
This clause states that the object of Subdivision D – Annual
reassessment of participating MDO’s IBNR exposure is to allow the
Minister to reassess a participating MDO’s IBNR exposure annually so that
the rate of the contribution imposed on participating members or the number of
years for which the contribution is imposed can be adjusted if necessary to
reflect the extent of the Commonwealth’s liability for IBNR indemnity
payments in relation to the MDO.
Subclauses (1) and (2) require the Actuary, taking into
account information obtained by the HIC from the MDO, to provide the Minister
with a written report that states the Actuary’s assessment of the IBNR
exposure as at the end of the financial year immediately before the start of a
contribution year for each participating MDO.
Subclauses (3), (4),
(5) and (6) provide for the HIC, if it believes on reasonable grounds
that the MDO is capable of providing information relevant to assessing the IBNR
exposure, to seek relevant information from the MDO under a written notice and
provide the information to the Actuary. The request must be in writing, state
what information is required, specify a day at least 28 days after the notice is
given to comply and state that a failure to comply with the request is an
offence. The notice may require the information to be verified by statutory
declaration.
This clause sets out where in the Division particular provisions may be
found.
This clause provides that a person is liable to pay an enhanced UMP
indemnity contribution for a financial year that is a contribution year if they
were a member of UMP on 1 July 2002 and were ordinarily resident in Australia or
an external Territory on that day and are not exempt under clause
59.
Clause 59 Exemptions
This clause provides that a person
is exempt from an enhanced UMP indemnity contribution for a financial year that
is a contribution year if they died before the imposition day or made a lump sum
payment under clause 64 before the imposition day or are exempt in circumstances
specified in the regulations. The regulations may provide that a person is
exempt from the enhanced UMP indemnity contribution either generally or for a
particular contribution year.
This clause sets out where in the Division particular provisions may be
found.
This clause provides that, subject to clauses 62, 63 and 64,
contributions are due and payable to the HIC on or before 1 November in a
contribution year, or such other day as is specified in the regulations.
This clause allows a person liable to pay contributions to apply to the
HIC in writing before the contribution for a year becomes payable to defer the
payment day for that year.
Under subclause (3) the HIC may approve
the application if satisfied that the person meets the conditions specified in
the regulations and a deferral has not already been approved.
If
approved the payment becomes due under subclause (4) on 1 November (or
such other day as is specified in the regulations) in the financial year
following the last contribution year for the relevant MDO.
Subclause
(5) requires the HIC to notify the person whether their application has been
approved, specify the deferred payment date, and inform the person of the effect
of subclause (7).
Subclause (6) provides for review by the
AAT of a decision by the HIC not to approve an application under this clause.
Subclause (7) provides that if the person dies before the
deferred payment day the amount deferred becomes payable to the HIC immediately
after the person’s death.
This clause allows a person liable to pay a medical indemnity
contribution to apply to the HIC in writing before the contribution for a year
becomes payable to pay the contribution by instalments over a period ending not
later than twelve months after the day on which the contribution would otherwise
have been payable, providing that the amount of the contribution is $1,000 or
more.
Subclause (3) requires the HIC to notify the person whether
their application has been approved, specify the period over which instalments
are to be paid and the amount and date of each instalment, and inform the person
of the effect of subclause (4).
Subclause (4) provides that if an
instalment is not paid on the due date, the whole of the unpaid amount of the
contribution becomes payable at that time.
Subclause (5) provides
for review by the AAT of a decision by the HIC not to approve an application
under this clause.
This clause allows a person liable to pay a medical indemnity
contribution to elect in writing to pay a lump sum before the amount of
contribution becomes payable.
If an election is made, subclause (3)
requires the HIC to notify the person of the amount of the lump sum worked
out under subclause (4) and the payment day.
Subclauses (4), (5)
and (6) set out the formula to be used in calculating the lump sum as
the product of the outstanding payment amount and the discount factor. The
outstanding payment amount is the current contribution liability multiplied by
the number of remaining provisional contribution years, plus any deferred
contribution liability. The discount factor is one, less the discount rate
multiplied by the number of remaining provisional contribution years less one.
The discount rate is set at 0.025 but may be varied by
regulation.
Subclause (7) provides that the provisional
contribution years for a participating MDO are the first financial year that is
a contribution year for medical indemnity contributions of that kind and the
next nine financial years, unless the regulations under subclause (8)
specify the provisional contribution years.
This clause provides that if an amount of contribution (including a lump
sum under clause 64) payable by a person remains wholly or partly unpaid
after it becomes due for payment the person is liable to pay a late payment
penalty calculated at the prescribed rate on the unpaid amount from the date the
contribution was due for payment until the day the unpaid contribution and the
late payment penalty are paid in full.
Subclause (3) provides that
late payment penalty is not payable for periods after a person’s
death.
Subclause (4) allows the HIC to remit a late payment
penalty in whole or in part, and subclause (5) provides for a review by
the AAT of a decision by the HIC not to remit a late payment penalty or to remit
only part of a late payment penalty.
This clause provides that a medical indemnity contribution, a lump sum
payable under clause 64 and a late payment penalty payable under
clause 65 must be paid to the HIC. The regulations may specify methods for
paying these amounts.
Subclauses (1) and (2) provide that if a person overpays an
amount of medical indemnity contribution or a late payment penalty in relation
to a contribution year the overpaid amount must be refunded unless the person
elects in writing to offset the overpaid amount against an amount they are
required to pay in the next contribution year.
Subclause (3)
provides that it a person overpays a lump sum payable under clause 64 the amount
overpaid must be refunded to the person.
Subclause (4)
appropriates the Consolidated Revenue Fund for the purpose of providing a refund
under this clause.
This clause provides that an amount of medical indemnity contribution
under the Bill, a lump sum payment under clause 64 and a late payment penalty
under clause 65 are debts due to the Commonwealth and may be recovered by the
HIC in a court of competent jurisdiction.
Clause 69 HIC may collect
money from a person who owes money to a person
This clause provides
for the recovery of a debt to the Commonwealth under clause 68 through garnishee
action.
Subclause (2) provides for the HIC to direct a third party
who owes or may owe money to a person who has a debt to the Commonwealth under
clause 68 to pay some or all of the money to the Commonwealth. The HIC must
also provide a copy of the direction to the person.
Subclause (3)
provides that the direction cannot require an amount to be paid to the
Commonwealth before it becomes owing to the person.
Subclauses
(4), (5) and (6) provide that it is an offence of strict
liability for the third party to fail to comply with the direction unless they
comply with the direction so far as they are able to.
Subclause (7)
provides that a court may order a person convicted of an offence under
subclause (4) to pay the Commonwealth an amount up to the amount involved in the
failure to comply.
Subclause (8) indemnifies the third party for
any payment made under the clause.
Subclauses (9) and (10)
require the HIC to give immediate notice to the third party if the debt due to
the Commonwealth is fully or partly discharged before the third party has made a
payment. If the debt is partly discharged, the HIC must vary the direction
under subclause (2).
Subclause (11) defines the circumstances
in which a third party is taken to owe money to a person.
This clause allows the HIC to issue a written certificate that a person
is liable to pay a medical indemnity contribution and setting out the
particulars of that contribution, and provides that the certificate is prima
facie evidence of the matters in the certificate in any civil proceedings under
this Bill.
Subclause (3) provides that a document purporting to be
a certificate must be taken to be a certificate and to have been properly issued
unless the contrary is established.
Subclauses (4) and (5)
allow the HIC to issue a certified copy of a certificate and provide that it is
to be treated as if it were the original.
This clause provides that if the HIC believes on reasonable grounds that
a person is capable of giving information relevant to determining whether a
person is liable to pay a medical indemnity contribution, and if so how much, it
may request the person to provide the information. The request must be in
writing, state what information is required, specify a day at least 28 days
after the notice is given to comply and state that a failure to comply with the
request is an offence. The notice may require the information to be verified by
statutory declaration.
This clause provides that a person who is exempt from the payment of a
medical indemnity contribution because of particular circumstances must notify
the HIC in writing within 28 days of the occurrence of a change in circumstances
affecting their exemption.
This clause provides that a person who fails to comply with a request
under subclauses 56(4) or 71(1) commits an offence of strict liability. A
person is excused from complying with the request if to do so would tend to
incriminate them or expose them to a penalty.
This clause provides that a person who fails to notify the HIC within a
particular period under clause 72 commits an offence of strict
liability.
This clause provides that the HIC has the general administration of this
Bill and the medical indemnity contribution legislation.
This clause provides that the HIC has such functions, additional to those
under the Health Insurance Commission Act 1973, as are conferred on it
under this Bill and the medical indemnity contribution legislation.
Subclause (1) defines various terms used in the clause. It
defines protected information as information obtained by a person to whom the
clause applies (being a person who is or was an officer) in the course of their
duties or the exercise of their powers and functions under the medical indemnity
legislation that relates to a person’s affairs; and a protected document
as a document that contains protected information.
Subclause (2)
provides that a person to whom the clause applies commits an offence if they
copy, disclose or produce protected information or a protected document to
another person other than in the performance of their duties or the exercise of
their powers and functions or to enable another person to perform functions
under the medical indemnity legislation.
Subclause (3) provides
that, despite subclause (2), the Secretary or the Managing Director of the HIC
may divulge protected information to a person if the Minister certifies that it
is necessary in the public interest, and may divulge protected information to a
person who the Minister believes is expressly or impliedly authorised to obtain
it by the person to whom the information relates.
Subclause (4)
provides that, despite subclause (2), the Secretary or the Managing Director of
the HIC may divulge protected information of a kind prescribed in regulations to
a person or authority prescribed in regulations.
Subclause (5)
provides that any person or authority, or person or employee under the
control of a person or authority, who receives information under subclauses (3)
and (4) is subject to subclause (2).
Subclause (6) provides that
the clause does not prohibit divulging or communicating to a person information
that relates to them.
This clause provides that the Bill does not extend to State insurance
within a State.
This clause allows the Governor General to make regulations prescribing
matters required or permitted to be prescribed under the Bill or necessary or
convenient to be prescribed for carrying out or giving effect to the Bill,
including prescribing penalties not exceeding 10 penalty units for offences
against the regulations.
MEDICAL INDEMNITY (IBNR INDEMNITY)
CONTRIBUTION BILL 2002
This Bill imposes the IBNR indemnity
contribution as a tax.
Clause 1 Short title
This clause sets out the short title
of the Bill
Clause 2 Commencement
This clause provides that
the Bill commences, or is taken to commence on 1 January 2003.
Clause
3 Definitions
This clause defines terms used in the Bill, or
indicates where else in the Bill terms are defined.
Clause 4
Imposition of IBNR indemnity contribution
This clause imposes the
IBNR indemnity contribution as a tax on participating members of a participating
MDO on the imposition day for each contribution year.
Clause 5
Contribution years and imposition days
This clause provides that each
financial year that starts on or after 1 July 2003 is a contribution year for a
participating MDO unless the regulations provide that a year is the last
contribution year for a participating MDO. It also provides that the imposition
day for a contribution year is 1 August unless another day is set by
regulations.
Clause 6 Amount of IBNR indemnity
contribution
This clause provides that the amount of IBNR indemnity
contribution is the applicable percentage of a participating member’s
annual subscription to a participating MDO for the base year. The applicable
percentage is 50%, or such lower percentage as is prescribed by regulation in
relation to the MDO for the contribution year. The regulations may specify
different percentages for different years for different MDOs, but may not
specify a percentage for a contribution year for an MDO that is higher than the
percentage applicable in the first contribution year.
Clause 7
Regulations
This clause allows the Governor General to make
regulations prescribing matters required or permitted to be prescribed under the
Bill or necessary or convenient to be prescribed for carrying out or giving
effect to the Bill.
MEDICAL INDEMNITY (ENHANCED UMP INDEMNITY)
CONTRIBUTION BILL 2002
This Bill imposes the enhanced UMP indemnity
contribution as a tax.
Clause 1 Short title
This clause sets out the short title
of the Bill
Clause 2 Commencement
This clause provides that
the Bill commences, or is taken to commence on 1 January 2003.
Clause
3 Definitions
This clause defines terms used in the Bill, or
indicates where else in the Bill terms are defined.
Clause 4
Imposition of enhanced UMP indemnity contribution
This clause imposes
the enhanced UMP indemnity contribution as a tax on the imposition day for each
contribution year on each person who was a member of UMP on 1 July
2002.
Clause 5 Contribution years and imposition
days
Subclauses (1) and (2) provide that the Minister
may declare in writing that a financial year is the first contribution year only
if the Commonwealth pays an amount under a Medical Indemnity Agreement within
the meaning of the Medical Indemnity Agreement (Financial Assistance –
Binding Commonwealth Obligations) Bill 2002.
Subclause (3)
provides that a declaration by the Minister is a disallowable instrument for the
purposes of section 46A of the Acts Interpretation Act
1901.
Subclause (4) provides that each financial year
following the first contribution year is a contribution year, unless regulations
under subclause (5) provide that a financial year is the last
contribution year.
Subclause (6) provides that the imposition day
for a contribution year is 1 August unless another day is set by
regulations
Clause 6 Amount of enhanced IBNR indemnity
contribution
Subclause (1) provides that, subject to
regulations under subclause (3), the amount of enhanced UMP indemnity
contribution imposed on a person for a contribution year is the sum of
Commonwealth payments of relevant amounts for the previous financial year under
subclause (2) divided by the number of people who were members of UMP on 1 July
2002.
Subclause (2) provides that relevant amounts are amounts
paid by the Commonwealth under a Medical Indemnity Agreement in relation to
claims notified before 29 April 2002 and finalised after 30 June 2002 and claims
notified on or after 1 July 2002 (other than claims in relation to incidents
that occurred between 29 April 2002 and 30 June 2002).
Subclauses
(3) and (4) provides that the regulations may provide that the amount
of enhanced UMP indemnity contribution imposed for a contribution year on
persons specified in the regulations is the amount specified in or worked out in
accordance with the regulations, as long as that amount is less than the amount
payable under subclause (1).
Clause 7 Regulations
This
clause allows the Governor General to make regulations prescribing matters
required or permitted to be prescribed under the Bill or necessary or convenient
to be prescribed for carrying out or giving effect to the
Bill.
MEDICAL INDEMNITY (CONSEQUENTIAL AMENDMENTS) BILL
2002
This Bill amends the secrecy provisions of the Health
Insurance Act 1973 and the National Health Act 1953 to include
reference to the medical indemnity legislation. It also amends definitions of
offences in the Health Insurance Commission Act 1973 to allow the HIC to
investigate offences against the medical indemnity legislation, and requires the
HIC to include in its Annual Report material on the operations of the medical
indemnity legislation.
Clause 1 Short title
This clause sets out the short title
of the Bill.
Clause 2 Commencement
This clause provides
that the Bill commences, or is taken to commence on 1 January
2003.
Clause 3 Schedule(s)
This clause provides that each
Act that is specified in a Schedule to the Bill is amended or repealed as set
out in the Schedule concerned, and that other items in a Schedule have effect
according to their terms.
Schedule 1 – Amendments
Item 1 Subsection 130(1)
This item amends the secrecy
provisions of the Health Insurance Act 1973 to provide that a person,
except in the performance of duties or the exercise of powers and functions
under the medical indemnity legislation, shall not record or communicate to any
person information about the affairs of another person acquired in the
performance of duties or the exercise of powers and functions under the
legislation.
Item 2 Subsection 130(25)
This item adds a
definition of medical indemnity legislation (being the Medical Indemnity Bill
2002, Medical Indemnity (IBNR Indemnity) Contribution Bill 2002 and the
Medical Indemnity (Enhanced Ump Indemnity) Contribution Bill 2002) to the
definitions subsection of the secrecy provision in the principal Act.
Item 3 After Paragraph 3A(1)(ba)
This item adds an offence
against the Medical Indemnity Bill 2002 to the list of offences under
subsection 3A(1) of the principal Act.
Item 4 Paragraph 3A(1)(c)
This item changes the definition of an offence under paragraph
3A(1)(c) against the Crimes Act 1914 and the Criminal Code to
include an offence referred to in the Medical Indemnity Bill
2002.
Item 5 After paragraph 3A(2)(b)
This item adds an
offence against the Medical Indemnity Bill 2002 to the list of offences
under subsection 3A(2) of the principal Act.
Item 6 Paragraph
3A(2)(c)
This item changes the definition of an offence under
paragraph 3A(2)(c) against sections 6, 7 and 7A of the principal Act and
paragraph 86(1)(a) of the Crimes Act 1914 to include an offence referred
to in the Medical Indemnity Bill 2002.
Item 7 Paragraph
3A(2)(d)
This item changes the definition of an offence under
paragraph 3A(1)(d) the Criminal Code to include an offence relating to an
indemnity scheme payment.
Item 8 After Paragraph
3A(2A)(c)
This item adds an offence against the Medical Indemnity
Bill 2002 to the list of offences under subsection 3A(2A) of the principal
Act.
Item 9 Paragraph 3A(2A)(d)
This item changes the
definition of an offence under paragraph 3A(2A)(d) against sections 6, 7 and 7A
of the principal Act and paragraph 86(1)(a) of the Crimes Act 1914 to
include an offence referred to in the Medical Indemnity Bill
2002.
Item 10 Paragraph 3A(2A)(e)
This item changes the
definition of an offence under paragraph 3A(2A)(e) against the Criminal Code
to include an offence relating to an indemnity scheme
payment.
Item 11 Subsection 3A(3)
This item broadens the
definitions subsection to apply to the whole of subsections 3A(2) and
3A(2A).
Item 12 Subsection 3A(3)
This item defines
indemnity scheme payment as having the same meaning as in the Medical Indemnity
Bill 2002.
Item 13 At the end of Section 42
This item
requires the HIC to include in its annual report information about the operation
of the Medical Indemnity Bill 2002, Medical Indemnity (IBNR Indemnity)
Contribution Bill 2002 and the Medical Indemnity (Enhanced Ump Indemnity)
Contribution Bill 2002.
Item 14 Subsection 135A(1)
This item amends the secrecy
provisions of the National Health Act 1953 to provide that a person,
except in the performance of duties or the exercise of powers and functions
under the medical indemnity legislation, shall not record or communicate to any
person information about the affairs of another person acquired in the
performance of duties or the exercise of powers and functions under the
legislation.
Item 15 Subsection 135A(24)
This item adds a
definition of medical indemnity legislation (being the Medical Indemnity Bill
2002, Medical Indemnity (IBNR Indemnity) Contribution Bill 2002 and the
Medical Indemnity (Enhanced Ump Indemnity) Contribution Bill 2002) to the
definitions subsection of the secrecy provision in the principal Act.