Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Medical Indemnity Legislation Amendment Bill 2006 is a further refinement of legislation implementing the government’s medical indemnity package, in the light of consultations with insurers and doctors regarding their experience of its operation.

The government’s original package of medical indemnity legislation in 2002 addressed the affordability of medical indemnity for doctors and the industry’s long-term viability, in a period of upheaval.

Thanks to these changes, medical practitioners in private practice have been able to obtain affordable medical indemnity insurance cover and insurers have been protected against more extreme claims. However, those who had left the medical workforce—including retirees, and those on maternity leave—often faced significant ongoing costs for ‘run-off cover’ for incidents which had occurred during their careers but had not been reported.

The Run-Off Cover Scheme, or ROCS, which began on 1 July 2004, is a logical extension of the medical indemnity package, designed to provide secure insurance for doctors who have left private practice. The intention was that medical indemnity insurers would provide cover under ROCS on the same basis as to doctors in the workforce, but in the former case the government would reimburse the cost of claims to insurers.

Although the government pays ROCS claims, these are funded by a levy on insurers so that the scheme operates on a cost-neutral basis, to the benefit of taxpayers, patients and doctors alike.

The present bill will align ROCS more closely to current industry practice, increase the level of certainty around the provision of ROCS cover, and simplify the administration of the scheme, following concerns raised by insurers and medical practitioners.

In particular, ROCS cover will no longer be limited to incidents which were covered by medical indemnity insurance at the time of their occurrence, but will also include those which were uncovered at the time, but for which the doctor subsequently took out retroactive cover—specifically, in his or her last contract of insurance before entering ROCS.

This change recognises that some of these gaps in cover may have been brief and inadvertent; if a doctor has addressed this by taking out retroactive cover, it seems unreasonable to exclude such periods from ROCS cover.

The cover insurers offer individual doctors under ROCS will mirror that provided immediately before they become eligible for ROCS. Other provisions ensure that the payment of claims—and the reimbursement of the cost of those claims by Medicare Australia—will be closely linked to insurers’ ordinary business practices.

From the doctors’ point of view, therefore, the transition to ROCS will be seamless: they will continue to receive the same cover and the same service.

Some of the provisions of this bill extend beyond ROCS. Apart from those clarifying abbreviations, these include a relaxation of penalty provisions in relation to compulsory offers of retroactive cover: doctors who accept such an offer will no longer have to respond in writing, but those who refuse retroactive cover will. This will ensure that no doctor misses out on retroactive cover by accident.

This change could be said to prejudice the system in favour of doctors’ taking out retroactive cover, but stops short of requiring it: medical indemnity insurance, including cover for past incidents, remains the responsibility of the individual doctor.

The government is working with medical indemnity insurers to ensure that doctors understand the importance of this decision, and in particular recognise that the medical indemnity cover they will have in retirement, in relation to past incidents, now depends entirely on their last contract of insurance. This means they should take particular care in relation to medical indemnity cover as they begin to think about retirement.

This bill builds upon the solid base of the government’s existing medical indemnity package, particularly in relation to ROCS. It provides for greater certainty, smoother operation and a seamless transition for doctors leaving the private medical workforce.

It demonstrates the ongoing commitment of the government to the medical indemnity industry, doctors and patients, and to working with doctors and insurers to ensure that medical indemnity insurance continues to operate viably, fairly and efficiently for the benefit of the industry, doctors, patients and taxpayers. I commend the bill to the House.

Debate (on motion by Mr Crean) adjourned.