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New medical indemnity arrangements.

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Media Release

The Hon Tony Abbott MP Minister for Health and Ageing

10 October 2003

New Medical Indemnity Arrangements

Today I had productive discussions with the AMA about medical indemnity issues.

The Government acknowledges that the concerns of doctors are real and that it is important that doctors have confidence in the medical indemnity insurance system in order that they can continue to practice.

The policy review process announced last Friday, which will begin very shortly, provides a firm basis for addressing these concerns. Detailed terms of reference for the policy review will be announced next week.

The current IBNR levy notices will be withdrawn and existing payments refunded. New levy notices will be issued after the policy review process is completed.

Prior to the commencement of the policy review, the Government undertakes to:

● Extend the high cost claims scheme to cover fifty per cent of claims between $500,000 and

$20 million; ● Treat claims under the Exceptional Claims Scheme on a ‘claims incurred’ basis;

● Fully indemnify doctors for the component of any settlement above $20 million under the

Exceptional Claims Scheme; ● Exempt from the IBNR levy all doctors employed by public hospitals or where their private

medical income is returned to those hospitals; ● Exempt all doctors aged 65 and over from the IBNR levy, regardless of practice income;

● Exempt all doctors from the IBNR levy who need to retire early because of disability or

permanent injury, and ● Exempt doctors’ and their estates from the IBNR levy liability due in the year of their death.

All of these measures will be implemented at the earliest opportunity.

The policy review mentioned above will comprise a lawyer experienced in insurance issues, an actuarial expert and two doctors. It is my intention to chair the group and Senator the Hon Helen Coonan will also be a member. The group will be assisted by staff drawn from the Government Taskforce on medical indemnity insurance and will report to the Prime Minister by 10 December.

The Government welcomes the AMA’s undertaking that there will be no further claims for financial assistance during the course of the review other than those announced above.

The group will report on ways to ensure that medical indemnity arrangements in Australia are financially sustainable; affordable for doctors; ensure that doctors can continue to practice with confidence, and safeguard the interests of consumers and the community. In undertaking its work, the group will examine the effectiveness of reforms to state and territory-based tort laws and new prudential arrangements for MDOs.

The Government welcomes the AMA’s expression of support for these arrangements and its advice to doctors that they can continue to practice with confidence. We look forward to a continuing constructive and positive working relationship into the future as these matters are dealt with.

The Government and the AMA agree that Australia needs a fair, affordable and sustainable medical indemnity insurance system and that this will best be achieved through the measures outlined above.

For more information call David Gazard on 0428 405 107