Doctors to pay more for indemnity, insurers warn

Doctors should expect to pay more for their indemnity premiums next year due to an unexpected change to the high-cost claims scheme, warn medicolegal insurers.

The Federal Government announced in the Mid-Year Economic and Fiscal Outlook that the threshold for the High Cost Claims Scheme would increase from $300,000 to $500,000 from July 2018.

Under the scheme, the government pays insurers half of every claim over the threshold. The higher threshold is tipped to save the government about $36 million over three years.

Avant says the knock-on effect will be a spike in all premiums of about 5%.

Although “a significant portion” of claims exceed the current threshold, the wider effect of the High Cost Claims Scheme is to keep down premiums for all doctors, according to senior medical officer Dr Penny Browne (pictured).

“It’s usually in the background. It’s on the tips of the tongues of insurers, not doctors,” she says.

The changes have been announced ahead of a scheduled government review of its contribution to medical indemnity which will run for two years.

Dr Browne says that increasing the high claims threshold – which has not been changed since the scheme began in 2003 –  should have undergone proper consultation.

“The government initiated a review but has then pre-empted its findings with this unilateral announcement. This could go against the trust between insurers and the government.”

She added that the timing of the change, amid the Medicare freeze and uncertainly over pathology rental agreements, was poor.

“Doctors face a range of cost pressures across the board and this move by the government will only add to the pressure. We believe that it will also mean higher out-of-pocket costs for patients.”

The High Cost Claims Scheme was introduced in 2003 to address “an environment of spiralling costs”, said Dr Browne.

The government has defended the move by saying that it “reflects greater maturity and stability in the medical indemnity market than when the scheme was introduced”.

Source: Australian Doctor