Medical Indemnity Amendment Act 2003 (Cth)

Medical Indemnity Amendment Act 2003 No. 121, 2003 An Act to amend the Medical Indemnity Act 2002, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Medical indemnity contribution Part 1—Amendments Medical Indemnity Act 2002 Part 2—Transitional provisions etc. Schedule 2—Exceptional claims indemnity scheme Medical Indemnity Act 2002 Medical Indemnity Amendment Act 2003 No. 121, 2003 An Act to amend the Medical Indemnity Act 2002, and for related purposes [Assented to 5 December 2003] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Medical Indemnity Amendment Act 2003. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent. 5 December 2003 2. Schedule 1, items 1 and 2 At the same time as the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 commences. 1 July 2003 3. Schedule 1, item 3 The day on which this Act receives the Royal Assent. 5 December 2003 4. Schedule 1, item 4 At the same time as the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 commences. 1 July 2003 5. Schedule 1, items 5 to 8 The day on which this Act receives the Royal Assent. 5 December 2003 6. Schedule 1, items 9 to 11 At the same time as the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 commences. 1 July 2003 7. Schedule 1, items 12 and 13 The day on which this Act receives the Royal Assent. 5 December 2003 8. Schedule 1, items 14 to 17 At the same time as the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 commences. 1 July 2003 9. Schedule 1, item 18 The day on which this Act receives the Royal Assent. 5 December 2003 10. Schedule 1, items 19 and 20 At the same time as the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 commences. 1 July 2003 11. Schedule 1, items 21 to 26 The day on which this Act receives the Royal Assent. 5 December 2003 12. Schedule 2 The day on which this Act receives the Royal Assent. 5 December 2003 Note: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Medical indemnity contribution Part 1—Amendments Medical Indemnity Act 2002 1 Paragraph 52(2)(a) Repeal the paragraph, substitute: (a) the person dies in or before that contribution year; or 2 Paragraph 52(2)(e) Omit "by the person; or", substitute: by the person and that lump sum has not later been: (i) refunded under section 67; or (ii) repaid to the person in accordance with an authorisation under section 33 of the Financial Management and Accountability Act 1997; or 3 After subsection 52(4) Insert: (4A) Regulations made for the purposes of subsection (4) may provide that a person is exempt from IBNR indemnity contribution in circumstances that are similar to those specified in subsection (2). 4 Paragraph 59(2)(b) Omit "by the person.", substitute: by the person and that lump sum has not later been: (i) refunded under section 67; or (ii) repaid to the person in accordance with an authorisation under section 33 of the Financial Management and Accountability Act 1997. 5 After subsection 59(3) Insert: (3A) Regulations made for the purposes of subsection (3) may provide that a person is exempt from enhanced UMP indemnity contribution in circumstances that are similar to those specified in subsection (2). 6 Section 61 After "a medical indemnity contribution", insert "that a person is liable to pay". 7 Section 61 (paragraph (b) in the cell at table item 1, column headed "becomes due and payable on...") Repeal the paragraph, substitute: (b) such later day as is specified in the regulations as the payment day for the contribution year either generally for all people or for the class of people that includes the person, as the case may be. 8 Subsection 62(1) Before "under this section", insert "for the person". 9 Subsection 62(3) Omit "if the HIC:", substitute "(the current application) if:". 10 Paragraph 62(3)(a) Before "is satisfied", insert "the HIC". 11 Paragraph 62(3)(b) Repeal the paragraph, substitute: (b) at the time the HIC approves the current application, either: (i) the HIC has not approved an application by the person to defer the payment day for that kind of medical indemnity contribution for an earlier contribution year under this section; or (ii) each application by the person to defer the payment day for that kind of medical indemnity contribution for an earlier contribution year under this section that has been approved by the HIC has subsequently been revoked or is in respect of a contribution from which the person is exempt. 12 Subsection 62(4) After "the contribution", insert "that the person is liable to pay". 13 Subsection 62(4) (paragraph (b) in the cell at table item 1, column headed "becomes due and payable on...") Repeal the paragraph, substitute: (b) such later day as is specified in the regulations either generally for all people or for the class of people that includes the person, as the case may be. 14 Paragraph 62(5)(c) Omit "subsection (7)", substitute "whichever of subsections (7) and (8) applies". 15 Subsection 62(7) Repeal the subsection, substitute: (7) If: (a) the contribution is IBNR indemnity contribution; and (b) before the deferred payment day worked out under subsection (4), either: (i) the person dies; or (ii) the person becomes exempt because of turning a particular age; the contribution becomes due and payable immediately after the person dies or turns that age. (8) If: (a) the contribution is enhanced UMP indemnity contribution; and (b) the person dies before the deferred payment day worked out under subsection (4); the contribution becomes due and payable immediately after the person dies. 16 Paragraph 63(1)(b) Omit "$1,000 or more", substitute "more than $1,000". 17 Subsection 64(1) Repeal the subsection (not including the heading or the note), substitute: (1) A person who is liable to pay: (a) IBNR indemnity contribution for a contribution year (the current contribution year) that starts on or after 1 July 2005; or (b) enhanced UMP indemnity contribution for a contribution year (the current contribution year) that starts on or after 1 July 2003; may elect to pay the lump sum worked out under subsection (4). 18 Subsection 64(5) (definition of deferred contribution liability) After "day", insert "for the person". 19 Subsection 67(1) After "unless", insert "the amount has been previously repaid to the person in accordance with an authorisation under section 33 of the Financial Management and Accountability Act 1997 or". 20 At the end of subsection 67(3) Add "unless the amount has been previously repaid to the person in accordance with an authorisation under section 33 of the Financial Management and Accountability Act 1997". 21 Section 72 Repeal the section, substitute: 72 HIC must be notified of a change in circumstances etc. (1) A person who: (a) is exempt from a medical indemnity contribution; and (b) ceases to be exempt from the contribution because: (i) the person's circumstances change before the start of, or during, a contribution year; or (ii) the person fails to satisfy a condition on which the exemption from the contribution depends; must notify the HIC of that change in circumstances or that failure, as the case may be. Note: Failure to notify is an offence (see section 74). (2) The notification must: (a) be in writing; and (b) set out details of the change in circumstances or failure of which the person is required to notify the HIC under subsection (1); and (c) be given to the HIC within 28 days after the day on which the person becomes aware of the change in circumstances or failure, as the case may be. 22 Subsection 74(1) Omit "change in circumstances", substitute "matter". 23 Subsection 74(2) Omit "those circumstances", substitute "that matter". Part 2—Transitional provisions etc. 24 Saving existing regulations Regulations in force immediately before the commencement of this item for the purposes of: (a) paragraph (b) of table item 1 of section 61 of the Medical Indemnity Act 2002; or (b) paragraph (b) of table item 1 of subsection 62(4) of the Medical Indemnity Act 2002; have effect after that commencement as if they were made for the purposes of that paragraph of that Act as substituted by item 7 or 13 of this Schedule, as the case requires. 25 Transitional—deferral of payment day for IBNR indemnity contribution (1) This item applies to an application under section 62 of the Medical Indemnity Act 2002 to defer the payment day for IBNR indemnity contribution for the contribution year that started on 1 July 2003 that: (a) was purportedly made before the commencement of this item; and (b) would have been valid but for the amendment made by item 1 of Schedule 1 to the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003. Note: The application will not in fact be valid because the imposition day has been changed retrospectively by item 1 of Schedule 1 to the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003 and one of the results of this is that the applicant will not have been entitled to make the application as the applicant will not have been, at that time, liable to pay an IBNR indemnity contribution. (2) An application that this item applies to has effect, and may be dealt with by the HIC, after the commencement of this item as though it were a valid application. (3) A purported approval under section 62 of the Medical Indemnity Act 2002 before the commencement of this item of an application to which this item applies has effect, and may be dealt with by the HIC, after the commencement of this item as though it were a valid approval if, but for the amendment made by item 1 of Schedule 1 to the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003, the approval would have been valid. Note: The approval will not in fact be valid because the application for the approval was not in fact valid (see the note to subitem (1)). (4) As soon as practicable after the commencement of this item, the HIC must give an applicant whose approval has effect under subitem (3) as though it were valid a written notice that: (a) states that the application has been approved; and (b) specifies the deferred payment day worked out under subsection 62(4) of the Medical Indemnity Act 2002 as amended by this Schedule; and (c) states the effect of subsection 62(7) of the Medical Indemnity Act 2002 as inserted by item 15 of this Schedule. 26 Transitional regulations The Governor‑General may make regulations prescribing matters of a transitional nature (including prescribing any saving or application provisions) arising out of the amendments made by this Schedule or the Medical Indemnity (IBNR Indemnity) Contribution Amendment Act 2003. Schedule 2—Exceptional claims indemnity scheme Medical Indemnity Act 2002 1 After paragraph 3(2)(a) Insert: (aa) meeting the amounts by which settlements and awards exceed insurance contract limits, if those contract limits meet the Commonwealth's threshold requirements; and 2 Subsection 4(1) Insert: exceptional claims indemnity means an exceptional claims indemnity paid or payable under Division 2A of Part 2. Note: Amounts payable under the Exceptional Claims Protocol are not covered by this definition. 3 Subsection 4(1) Insert: Exceptional Claims Protocol means the protocol (as amended and in force from time to time) determined by the Minister under section 34X. 4 Subsection 4(1) Insert: high cost claim indemnity means a high cost claim indemnity paid or payable under Division 2 of Part 2. 5 Subsection 4(1) Insert: IBNR indemnity means an IBNR indemnity paid or payable under Division 1 of Part 2. 6 Subsection 4(1) (definition of indemnity scheme payment) Repeal the definition, substitute: indemnity scheme payment means: (a) an IBNR indemnity; or (b) a high cost claim indemnity; or (c) an exceptional claims indemnity. 7 Subsection 4(1) (after paragraph (a) of the definition of late payment penalty) Insert: (aa) in relation to a debt owed under section 34T—means a penalty payable under section 34W; and 8 Subsection 4(1) Insert: legal practitioner means a person who is enrolled as a barrister, a solicitor, a barrister and solicitor, or a legal practitioner, of: (a) a federal court; or (b) a court of a State or Territory. 9 Subsection 4(1) Insert: medical indemnity cover: a contract of insurance provides medical indemnity cover for a person if: (a) the person is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends; and (b) the insurance cover indemnifies the person (subject to the terms and conditions of the contract) in relation to claims that may be made against the person in relation to incidents that occur or occurred in the course of, or in connection with, the practice by the person of a medical profession. Note: A single contract of insurance may provide medical indemnity cover for more than one person. 10 Subsection 4(1) (definition of payment) After "has", insert "(other than in Division 2A of Part 2)". 11 Subsection 4(1) Insert: qualifying claim certificate means a certificate issued by the HIC under section 34E. 12 Subsection 4(1) Insert: subject to appeal: a judgment or order is subject to appeal until: (a) any applicable time limits for lodging an appeal (however described) against the judgment or order have expired; and (b) if there is such an appeal against the judgment or order—the appeal (and any subsequent appeals) have been finally disposed of. 13 Subsections 4(3) and (4) After "this Act", insert "(other than Division 2A of Part 2)". 14 Subsection 30(2) (note) Repeal the note. 15 Subsection 30(4) Repeal the subsection. 16 After Division 2 of Part 2 Insert: Division 2A—Exceptional claims indemnity scheme Subdivision A—Introduction 34A Guide to the exceptional claims indemnity provisions (1) This Division provides that an exceptional claims indemnity may be paid in relation to a liability of a person if: (a) the liability relates to a claim against the person in relation to an incident that occurs in the course of, or in connection with, the practice by the person of a medical profession, being a claim that has been certified as a qualifying claim; and (b) the liability exceeds the amount payable under an insurance contract that has a contract limit satisfying the relevant threshold. (2) This Division also provides for the determination of an Exceptional Claims Protocol that can deal with other matters relating to claims that have been certified as qualifying claims. (3) The following table tells you where to find the provisions dealing with various issues: Where to find the provisions on various issues Item Issue Provisions 1 certification of claims that qualify for exceptional claims indemnity (including the threshold requirement for the insurance contract) sections 34E to 34K 2 when is an exceptional claims indemnity payable in respect of a liability? sections 34L and 34M 3 some liabilities are only partly covered sections 34N and 34O 4 how much exceptional claims indemnity is payable? section 34P 5 how must an exceptional claims indemnity be applied? section 34Q 6 who is liable to repay an overpayment of exceptional claims indemnity? section 34R 7 what if a payment is received that would have reduced the amount of an insurance payment? sections 34S to 34W 8 the Exceptional Claims Protocol, and what it can deal with sections 34X and 34Y 9 modifications and exclusions by regulations section 34Z 10 how does a person apply for an exceptional claims indemnity? section 37A 11 when will an exceptional claims indemnity be paid? section 37B 12 what information has to be provided to the HIC about exceptional claims matters? section 38 13 what records must be kept in relation to exceptional claims matters? section 39 14 how are overpayments of exceptional claims indemnity recovered? sections 41 and 42 34B Definitions In this Division: practitioner's contract limit, in relation to a person for whom a contract of insurance provides medical indemnity cover, means the maximum amount payable, in aggregate, by the insurer under the contract in relation to claims against the person. Note 1: If the contract provides medical indemnity cover for more than one person, there must be a separate contract limit for each of those persons. Note 2: For how this definition applies if the contract provides for deductibles, see section 34C. Note 3: For how this definition interacts with the high cost claim indemnity scheme, see section 34D. qualifying liability, in relation to a claim, has the meaning given by section 34M. termination date means the date, if any, set by regulations under section 34G. 34C Treatment of deductibles (1) This section applies if, under a contract of insurance that provides medical indemnity cover for a person (the practitioner), the insurer is entitled to count an amount (the deductible amount): (a) incurred by the insurer in relation to a claim against the practitioner; or (b) paid or payable by the practitioner or another person in relation to a claim against the practitioner; towards the maximum amount payable, in aggregate, under the contract in relation to claims against the practitioner, even though the insurer has not paid, and is not liable to pay, the amount under the contract. (2) For the purpose of the definition of practitioner's contract limit in section 34B, the maximum amount payable, in aggregate, under the contract in relation to claims against the practitioner is as stated in the contract, even though the insurer (because of the deductible amount) may not actually be liable to pay the whole of that maximum amount. (3) For the purpose of the references in paragraphs 34L(1)(e) and (f) to an amount that an insurer has paid or is liable to pay under a contract of insurance, the deductible amount is to be counted as if it were an amount that the insurer has paid or is liable to pay under the contract. (4) However, for the purpose of the reference in paragraph 34L(1)(e) to an amount that an insurer would have been liable to pay under a contract of insurance, the deductible amount is not to be counted as if it were an amount that the insurer would have been liable to pay under the contract. 34D Interaction with high cost claim indemnity scheme For the purposes of the definition of practitioner's contract limit in section 34B, and of paragraphs 34L(1)(e) and (f), an amount that an insurer has paid or is liable to pay, or would have been liable to pay, under a contract of insurance is not to be reduced on account of a high cost claim indemnity paid or payable, or that would have been payable, to the insurer. Subdivision B—Certification of qualifying claims 34E When may the HIC certify a claim as a qualifying claim? Criteria for certification (1) The HIC may issue a certificate stating that a claim is a qualifying claim if the HIC is satisfied that: (a) the claim is a claim for compensation or damages that is or was made by a person against another person (the practitioner); and (b) the claim relates to: (i) an incident that occurs or occurred; or (ii) a series of related incidents that occur or occurred; in the course of, or in connection with, the practice by the practitioner of a medical profession; and (c) either: (i) the incident occurs or occurred; or (ii) one or more of the incidents in the series occurs or occurred; in Australia or an external Territory; and (d) the incident did not occur, or the incidents did not all occur, in the course of the provision of treatment to a public patient in a public hospital; and (e) there is a contract of insurance in relation to which the following requirements are satisfied: (i) the contract provides medical indemnity cover for the practitioner in relation to the claim, or would, but for the practitioner's contract limit, provide such cover for the practitioner in relation to the claim; (ii) the practitioner's contract limit equals or exceeds the relevant threshold (see section 34F); (iii) the insurer is a general insurer, within the meaning of the Insurance Act 1973; (iv) the insurer entered into the contract in the ordinary course of the insurer's business; and (f) the insurer was first notified of the claim, or of facts that might give rise to the claim, on or after 1 January 2003; and (g) if a termination date for the exceptional claims indemnity scheme is set (see section 34G), the incident, or one or more of the incidents, to which the claim relates occurred before the termination date; and (h) the claim is not a claim of a class specified in regulations made for the purposes of this paragraph; and (i) the contract of insurance is not a contract of a class specified in regulations made for the purposes of this paragraph; and (j) a person has applied for the certificate in accordance with section 34H. Note 1: Paragraph (d)—for what happens if some, but not all, of the incidents in a series occur in the course of the provision of treatment to a public patient in a public hospital, see section 34N. Note 2: Paragraph (g)—for what happens if some, but not all, of the incidents in a series occur after the termination date, see section 34O. When a certificate is in force (2) The certificate comes into force when it is issued and remains in force until it is revoked. Matters to be identified or specified in certificate (3) The certificate must: (a) identify: (i) the practitioner; and (ii) the claim; and (iii) the contract of insurance in relation to which paragraph (1)(e) is satisfied; and (b) specify the relevant threshold. The certificate may also contain other material. AAT review of decision to refuse (4) An application may be made to the Administrative Appeals Tribunal for review of a decision of the HIC to refuse to issue a qualifying claim certificate. Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable. HIC to give applicant copy of certificate (5) If the HIC decides to issue a qualifying claim certificate, the HIC must, within 28 days of making its decision, give the applicant a copy of the certificate. However, a failure to comply does not affect the validity of the decision. 34F What is the relevant threshold? The relevant threshold (1) For the purposes of subparagraph 34E(1)(e)(ii), the relevant threshold is: (a) if the insurer was first notified of the claim, or of facts that might give rise to the claim, on or after 1 January 2003 and before 1 July 2003—$15 million; or (b) if the insurer is or was first notified of the claim, or of facts that might give rise to the claim, on or after 1 July 2003—$20 million, or such other amount as is specified in the regulations as the threshold. Threshold specified in regulations only applies to contracts entered into after the regulations take effect (2) A regulation specifying an amount as the threshold (or changing the amount previously so specified) only applies in relation to contracts of insurance entered into after the regulation takes effect. When regulations reducing the threshold take effect (3) A regulation reducing the threshold (which could be the threshold originally applicable under subsection (1), or that threshold as already changed by regulations) takes effect on the date specified in the regulations, which must be the date on which the regulations are notified in the Gazette or a later day. When regulations increasing the threshold take effect (4) A regulation increasing the threshold (which could be the threshold originally applicable under subsection (1), or that threshold as already changed by regulations), takes effect on the date specified in the regulations, which must be at least 3 calendar months after the date on which the regulations are notified in the Gazette. 34G Setting a termination date (1) The regulations may set a termination date for the exceptional claims indemnity scheme. Note: The scheme does not cover incidents that occur after the termination date (see paragraph 34E(1)(g) and section 34O). (2) The termination date cannot be earlier than 1 January 2006, and cannot be before the date on which the regulations are notified in the Gazette. 34H Application for a qualifying claim certificate (1) An application for the issue of a qualifying claim certificate in relation to a claim may be made by the person against whom the claim is or was made, or by a person acting on that person's behalf. (2) The application must: (a) be made in writing using a form approved by the HIC; and (b) be accompanied by the documents and other information required by the form approved by the HIC. 34I Time by which an application must be decided (1) Subject to subsection (2), the HIC is to decide an application for the issue of a qualifying claim certificate on or before the 21st day after the day on which the application is received by the HIC. (2) If the HIC requests a person to give information under section 38 in relation to the application, the HIC does not have to decide the application until the 21st day after the day on which the person gives the information to the HIC. 34J Obligation to notify the HIC if information is incorrect or incomplete (1) If: (a) a qualifying claim certificate is in force in relation to a claim; and (b) a person becomes aware that the information provided to the HIC in connection with the application for the certificate was incorrect or incomplete, or is no longer correct or complete; and (c) the person is: (i) the person who applied for the certificate; or (ii) another person who has applied for a payment of exceptional claims indemnity, or for a payment under the Exceptional Claims Protocol, in relation to the claim; the person must notify the HIC of the respect in which the information was incorrect or incomplete, or is no longer correct or complete. Note: Failure to notify is an offence (see section 46). (2) The notification must: (a) be made in writing; and (b) be given to the HIC within 28 days after the person becomes aware as mentioned in subsection (1). 34K Revocation and variation of qualifying claim certificates Revocation (1) The HIC may revoke a qualifying claim certificate if the HIC is no longer satisfied as mentioned in subsection 34E(1) in relation to the claim. (2) To avoid doubt, in considering whether it is still satisfied as mentioned in subsection 34E(1) in relation to the claim, the HIC may have regard to matters that have occurred since the decision to issue the qualifying claim certificate was made, including for example: (a) the making of regulations for the purpose of paragraph 34E(1)(h) or (i); or (b) changes to the terms and conditions of the contract of insurance identified in the certificate. Variation (3) If the HIC is satisfied that a matter is not correctly identified or specified in a qualifying claim certificate, the HIC may vary the certificate so that it correctly identifies or specifies the matter. Effect of revocation (4) If: (a) the HIC revokes a qualifying claim certificate; and (b) an amount of exceptional claims indemnity has already been paid in relation to the claim; the amount is an amount overpaid to which section 41 applies. Effect of variation (5) If: (a) the HIC varies a qualifying claim certificate; and (b) an amount of exceptional claims indemnity has already been paid in relation to the claim, and that amount exceeds the amount that would have been paid if the amount of indemnity had been determined having regard to the certificate as varied; the amount of the excess is an amount overpaid to which section 41 applies. AAT review of decision to revoke or vary (6) An application may be made to the Administrative Appeals Tribunal for review of a decision of the HIC to revoke or vary a qualifying claim certificate. Note: Section 27A of the Administrative Appeals Tribunal Act 1975 requires notification of a decision that is reviewable. HIC to give applicant copy of varied certificate (7) If the HIC decides to vary a qualifying claim certificate, the HIC must, within 28 days of making its decision, give the applicant a copy of the varied certificate. However, a failure to comply does not affect the validity of the decision. Subdivision C—Exceptional claims