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Medical and Midwife Indemnity Legislation Amendment Bill 2021

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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 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.

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.

 



 

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.

 

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.

 

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.

 

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 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.



 

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 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.”

 

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