Note This Scheme provides for payments to be made in respect of medical indemnity cover provided on or after 1 January 2004.
3. The Scheme
This Scheme provides for the making of payments of subsidies to:
(a) medical indemnity insurers and MDOs on behalf of medical practitioners where the medical indemnity insurer or MDO agree to administer this Scheme by entering into a PSS contract for the purposes of this Scheme; and
(b) contracted insurers and contracted MDOs to help them meet the cost of administering this Scheme, including implementation costs.
4. Definitions
The general list of definitions for this Scheme is at Part 10.
5. Approved manner and timeframes
Where:
(a) this Scheme requires something to be done in a manner or within a timeframe approved by the Chief Executive Medicare or the Secretary; and
(b) the PSS contract sets out the manner or the timeframe in which that thing is to be done,
the requirement in the PSS contract is taken to be the manner or the timeframe approved by the Chief Executive Medicare or the Secretary, as the case requires, in which the thing is to be done.
6. Premium period
Where the context permits, references in this Scheme to a ‘premium period’ include part of a premium period.
Part 2 PSS contract
7. The Commonwealth may enter into contracts
(1) The Commonwealth may enter into a contract (the PSS contract) with a medical indemnity insurer for the purposes of this Scheme.
(2) If a contract for the purposes of this Scheme is executed before the commencement of this Scheme, the contract is taken to have been entered into under subsection (1).
(3) An MDO may also be a party to a contract entered into under subsection (1), but if so, a payment made under this Scheme to either the contracted insurer or the contracted MDO satisfies the liability to make the payment under this Scheme.
(4) For the avoidance of doubt, a PSS contract may be amended from time to time in accordance with its terms.
8. Matters to be included in PSS contracts
(1) A PSS contract must include conditions that must be satisfied for the payment of a subsidy to the following effect:
(a) that the obligations of a contractor under the contract apply only in relation to a medical practitioner who has informed the contractor that he or she agrees to participate in the Scheme; and
(b) that acknowledges:
(i) the premium charged by a medical indemnity insurer to a member is a debt due to the insurer from the member; and
(ii) the member is responsible for payment of a premium, although this responsibility may be satisfied in part by a subsidy being paid by the Chief Executive Medicare under this Scheme to the contractor on behalf of the member in respect of that premium.
(2) A PSS contract must:
(a) include obligations on the contracted insurer to participate in dispute-resolution processes; and
(b) provide that the Chief Executive Medicare will pay to the contractor (subject to compliance with this Scheme) an administration fee in respect of the administrative obligations imposed on the contractor by this Scheme.
(3) Subsections (1) and (2) do not limit the conditions or other matters that may be included in a PSS contract, provided they do not contradict a requirement referred to in those subsections.
9. Inconsistent obligations
If compliance with a PSS contract by a contractor or the Commonwealth (the parties) would result in non-compliance, or an inconsistency, with the Act or this Scheme, the party or parties, as the case may be, must not comply with that obligation, but the non-compliance with that obligation does not affect other obligations of the parties under the contract.
10. Accrued rights and obligations
The rights and obligations accrued under a PSS contract survive the termination or expiry of the contract.
Note Section 39 deals with former contractors.
Part 3 Eligible medical practitioners
11. Eligibility for subsidy to be paid on behalf of medical practitioners
(1) Subject to this Scheme, a medical practitioner who:
(a) is an eligible member; and
(b) complies with the conditions in section 13,
is eligible for a premium period for a subsidy to be paid to a contractor on his or her behalf in accordance with this Scheme.
(2) For the avoidance of doubt, an eligible member is not eligible to be paid a subsidy:
(a) directly; or
(b) at any time when a PSS contract with a contractor to which the member owes a premium is not in force, other than where there are accrued liabilities for payment under a PSS contract which continue after termination or expiry of the PSS contract; or
(a) where the contractor has not complied with the conditions set out in this Scheme or the PSS contract for the payment of subsidy on behalf of a member.
(3) If for a premium period:
(a) a subsidy has been paid under this Scheme to a contractor on behalf of an eligible member; or
(b) a liability to pay a medical indemnity insurer or MDO a subsidy on behalf of an eligible member has arisen under a terminated or expired PSS contract,
the member is not eligible to have a subsidy paid on his or her behalf to another contractor in respect of the same period unless the contractor has repaid, or caused to repay, the amount of the subsidy to the Chief Executive Medicare.
Note The eligible member must repay to the first contractor the amount the contractor had to repay to the Chief Executive Medicare – see section 51.
(5) If a subsidy has been paid to a contractor on behalf of a member for a premium period and the member has not paid to the contractor, on demand of the contractor, the full amount of any subsidy paid to the contractor which the contractor is required to repay to the Chief Executive Medicare under this Scheme, the member ceases to be eligible for a subsidy to be paid on his or her behalf for the whole of that premium period and any further premium period until the member has repaid to the contractor the outstanding amount.
Note The medical practitioner may be required to repay the contractor in accordance with section 51.
(6) If a member has received a payment under the MISS (whether received before or after the repeal of the MISS) which relates to medical indemnity cover for any period on or after 1 January 2004, the member is not eligible to be paid a subsidy under this Scheme for the same period of the medical indemnity cover otherwise than in accordance with section 20.
12. Eligible members
(1) Subject to this section, the following categories of members are eligible members for a premium period:
(a) a member whose gross indemnity costs for a premium period exceed 7.5% of the member’s actual income or, where a calculation is being made as to the amount of an advance subsidy, 7.5% of the member’s estimated income; or
(b) a procedural general practitioner practising in a rural area; or
(c) a member with a MISS entitlement.
(2) A member is a member with a MISS entitlement for a premium period if:
(a) the member made an application under the MISS when the MISS was in force; and
(b) a responsible officer:
(i) determined under the MISS that the member was eligible for a subsidy under the MISS (whether or not payment of the subsidy has yet been made to the member); or
(ii) determines that if the MISS were still in force, the member would have been entitled to a subsidy; and
(c) either:
(i) the member has, since the MISS ceased to be in force, continuously practised in the speciality group which qualified the member for subsidy under the MISS on 30 June 2004; or
(ii) if the member has ceased practising in that speciality group because the member is on maternity leave or other leave and resumes practice in that speciality group within 12 months of the day on which he or she ceased so to practise.
(3) A member whose practice is primarily based on public billings or services, but who during a premium period:
(a) obtains medical indemnity cover for private medical practice for which income is received; and
(b) is not indemnified under a right to private practice agreement,
is not an eligible member in respect of his or her private medical practice unless the member's actual income generated from that practice exceeds $1,000 for the whole of the premium period.
(4) A member who does not receive any income from private medical practice during a premium period:
(a) is not an eligible member unless subsection (5) applies; and
(b) if subsection (5) applies, is taken to be an eligible member for the purpose of paragraph (1) (a).
(5) A member who practises as a medical practitioner only in the public sector during a premium period (and thereby earns no income from private medical practice) is an eligible member for that premium period if the member's contract of insurance with the contractor provides run-off cover, retroactive cover or both for incidents that occurred in the course of, or in connection with, the practitioner's private medical practice at a time when he or she was deriving income from practising as a medical practitioner.
(6) For the avoidance of doubt, a member who practises as a medical practitioner only in the public sector during a premium period (and thereby earns no income from private practice) is not an eligible member for that premium period if the only contract, or contracts, of insurance he or she holds with the contractor provides medical indemnity cover only for medico-legal costs or damages in respect of gratuitous services or both of those types of cover.
(7) If a member has medical indemnity cover provided by an insurer in compliance with section 26A of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003, the member is not an eligible member for the period during which that cover is in effect.
(8) If a contractor makes a compulsory offer to a member of medical indemnity cover in compliance with section 23 of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 and at the time that cover, if accepted, takes effect:
(a) the member had held medical indemnity cover with that contractor, or its associated MDO, on a continuous basis for the previous 10 or more years; and
(b) the contractor provides the cover required to be offered by that Act at a cost to the member of no more than $50 (exclusive of taxes and charges),
the member is not an eligible member for any period that the cover is in effect.
12A Medical practice outside Australia
(1) If a member's contract of insurance for a premium period provides medical indemnity cover for the practice of his or her medical profession carried on outside Australia or both in and outside Australia, subsection (2) applies to the member.
(2) The member is not eligible for subsidy under this Scheme:
(a) if the member's contract of insurance provides medical indemnity cover only for the practice of his or her medical profession carried on outside Australia; or
(b) where the member's contract of insurance provides medical indemnity cover for the practice of his or her medical profession carried on both in and outside Australia, if the member has practised as a medical practitioner outside Australia for a total of six months or more during the premium period.
Note Section 22 of the Acts Interpretation Act 1901 defines 'month'.
(3) The six-month period referred to in subsection (2) includes leave taken in the ordinary course of medical practice (such as holiday or illness), but does not include any other absence from practice as a medical practitioner.
(4) For subsection (2), if during a premium period a member practises outside Australia in one of the circumstances referred to in the Medical Indemnity Regulations 2003 for the purposes of paragraph 34E (1) (c) of the Act, the practice is taken to be practice in Australia for that premium period.
Note The Medical Indemnity Regulations 2003 refer to incidents (1) involving Australian citizens or residents which occur outside Australia while the person and medical practitioner are on a sporting, cultural or official tour, or (2) where the practitioner is undertaking aid work outside Australia and the incident involves that work.
13. Conditions for medical practitioners
(1) The conditions with which an eligible member must comply for a premium period are:
(a) the member has consented to the contractor receiving payments, if any, under this Scheme on behalf of the member; and
(b) the member has given to the contractor or the Chief Executive Medicare the information requested by the contractor or the Chief Executive Medicare in the form and within the period of time required by the contractor or the Chief Executive Medicare; and
Note The Chief Executive Medicare may request information under section 44 of the Act.
(e) the member has paid the contractor an amount that equals the amount of the premium less the subsidy determined in accordance with section 18; and
(f) the member has paid to a contractor (whether or not the member’s contract of insurance is still with that contractor), on demand of the contractor, the full amount of any subsidy paid to the contractor which the contractor has repaid, or is required to repay, to the Chief Executive Medicare under this Scheme for any premium period.
Part 4 Calculating the amount of subsidy
14. PSS calculation
(1) For an eligible member referred to in paragraph 12 (1) (a), the PSS calculation is:
(a) for premium periods starting before 1 July 2012, 80% of the amount by which the member’s gross indemnity costs exceed the base amount; and
(b) for premium periods starting on or after 1 July 2012 and before 1 July 2013, 70% of the amount by which the member’s gross indemnity costs exceed the base amount; and
(c) for premium periods starting on or after 1 July 2013, 60% of the amount by which the member’s gross indemnity costs exceed the base amount.
(2) Base amount means:
(a) for a calculation of subsidy under Part 5, 7.5% of the eligible member’s estimated income; or
(b) for a calculation of subsidy under Part 6, 7.5% of the eligible member’s actual income.
(3) For a member referred to in subsection 12 (5), the base amount in subsection (1) is zero and the PSS calculation is:
(a) for premium periods starting before 1 July 2012, 80% of the member’s gross indemnity costs; and
(b) for premium periods starting on or after 1 July 2012 and before 1 July 2013, 70% of the member’s gross indemnity costs; and
(c) for premium periods starting on or after 1 July 2013, 60% of the member’s gross indemnity costs.
15. Rural calculation
(1) For a procedural general practitioner practising in a rural area, the rural calculation is 75% of the difference between:
(a) the amount of the premium for that practitioner; and
(b) the amount of the lowest base premium for a non-procedural general practitioner in the same income band, practising in the same State, and who has medical indemnity cover with the same contracted insurer.
Note 'Lowest base premium' and ‘State’ are defined in section 52.
(2) If the procedural general practitioner's medical indemnity cover for procedural general practice is increased solely to cover the practitioner's performance of non-therapeutic cosmetic procedures, the increase in premium for the extended services is not to be included in the premium for subsection (1).
Note Subsection (2) applies only to rural practitioners who come within the definition of procedural general practitioner, which excludes a practitioner whose procedural general practice involves only non-therapeutic cosmetic procedures. Under subsection (2) above, if a rural procedural general practitioner is required to pay a higher premium because he or she is performing non-therapeutic cosmetic procedures, the additional amount of premium is not included in the rural calculation.
16. [Deleted]
17. MISS calculation
For a member with a MISS entitlement, the MISS calculation is determined using the MISS methodology set out in the Schedule.
18. Amount of subsidy
(1) This section applies subject to section 19.
(2) Subject to this Scheme, the amount of subsidy payable on behalf of an eligible member for a premium period is:
(a) for an eligible member referred to in paragraph 12 (1) (a), the amount calculated using the PSS calculation; or
(b) for a procedural general practitioner in a rural area, the amount calculated using the rural calculation; or
(c) for a member with a MISS entitlement, the amount calculated using the MISS calculation.
(3) If during the whole or part of a premium period, a member is an eligible member in more than one category mentioned in subsection (2), the amount of subsidy calculated for that member for the premium period or part of the period is, unless section 22 applies, the higher of the amounts calculated for each of the categories applying to the member at that time.
(4) For the avoidance of doubt, an eligible member can be paid a subsidy only in respect of one category at any one time during the premium period.
19. Calculation where change of circumstances in premium period
(1) If the circumstances that formed the basis on which the subsidy payable to a member was calculated change during a premium period, the subsidy payable to the member must be recalculated having regard to those changed circumstances.
(2) If a member is eligible during part of a premium period in one category (after taking account of subsection 18 (3)) and then changes to another category during another part of the premium period so that a different amount of subsidy applies (after taking account of subsection 18 (3)), the total subsidy payable to the member for the whole of the premium period is the sum of the amounts calculated for each part of the premium period.
20. Calculation where a member has received a subsidy under the MISS
If an eligible member has received a subsidy under the MISS which relates to a premium for medical indemnity cover for any period on or after 1 January 2004 (the first amount), the amount of subsidy calculated under subsection 18(2) for the same period to which the first amount relates (the second amount) is, if the second amount is greater than the first amount, the difference between the first amount and the second amount.
Note Applications for a subsidy under the MISS can be made until midnight on 30 June 2004. Section 50 of the Acts Interpretation Act 1901 applies to the MISS after its repeal to preserve rights under the MISS where applications are made before its repeal.
21. [Deleted]
22. Calculation for certain members where actual income not provided
If a member with a MISS entitlement or a rural procedural general practitioner does not provide to the contractor his or her estimated income or a statutory declaration as to his or her actual income for the premium period as required by the contractor, the amount of subsidy payable on behalf of that member for that premium period is calculated using:
(a) for a member with a MISS entitlement, the MISS calculation; or
(b) for a rural procedural general practitioner, the rural calculation,
notwithstanding that the member may have been entitled to a higher amount of subsidy under one of the other calculations.
23. [Deleted]
24. Gross indemnity costs
(1) Gross indemnity costs means, for a premium period, costs charged to a member, or for which a member is liable, comprising any:
(a) premium; and
(b) membership fees; and
(d) costs payable for retroactive or run-off cover; and
(e) for a member other than a procedural general practitioner in a rural area, 50% of any risk surcharge charged to the member, where the risk surcharge used for this calculation is not to exceed the risk surcharge cap,
but do not include:
(f) GST; or
(g) stamp duty; or
(h) capital calls; or
(i) excess payments or deductibles; or
(j) charges imposed by the contracted insurer on a member for late payment of any of these costs (including the premium); or
(k) costs for previous premium periods except the costs of retroactive cover or run-off cover; or
(l) late payment penalties under the Act; or
(m) for the avoidance of doubt, any amount of premium for a policy that primarily covers the employees of a medical practitioner or an entity that runs a medical practice (being a company, partnership or other entity).
Note The operation of this subsection is qualified in respect of offers to provide medical indemnity cover to a member on or after 1 January 2008 - see section 25A.
(3) If the member’s gross indemnity costs change at any time during the premium period, an adjustment of the amount of subsidy, taking into account change in premium, must be made in accordance with this Scheme.
(4) In this section:
capital calls means a capital contribution required of members under the rules of an MDO;
risk surcharge means any surcharge or loading applied by a contractor to a member’s premium to reflect the prior claims history or other particular circumstances of that member;
risk surcharge cap means an amount that does not exceed the premium, excluding the risk surcharge.
25. Actual income
(1) In this Scheme, actual income means the total of all billings generated by members from their practice for which they require medical indemnity cover for a premium period (in their name) or for which they are personally liable, including without limitation:
(a) medicare benefits; and
(b) payments by individuals, the Commonwealth Department of Veterans' Affairs, workers compensation schemes and third-party and/or vehicle insurers; and
(c) income earned for medical practice overseas if the member's contract of insurance covers any overseas practice (including, for the avoidance of doubt, income for practice referred to in subsection 12A (4)),
whether retained by the member or otherwise and before any apportionment or deduction of any expenses and/or tax.
Note Actual income may need to be provided for parts of a premium period – see section 19.
(2) If as part of the member's medical practice the member derives income from any other sources (such as professional fees and incentive payments) this income must be included in the declaration of actual income.
(3) Where, for a premium period, the gross income of a member includes income from the provision of both private and public medical services, the actual income for the member is limited for the purpose of the calculation of gross indemnity costs and payment of subsidy to the income that relates to the provision of medical services for which medical indemnity cover is not provided by a public sector organisation.
Note The operation of this section is qualified in respect of offers to provide medical indemnity cover to a member on or after 1 January 2008 - see section 25A.
Note Estimated income is calculated in the same manner as for actual income – see the definition in Part 10.
25A Limitation of gross indemnity costs and actual income
(1) If a contractor makes a written offer to provide medical indemnity cover to a member on or after 1 January 2008:
(a) the premium referred to in paragraph 24 (1) (a) is limited to premium that is for medical indemnity cover in respect of private medical services provided by the member; and
(b) the actual income referred to in subsection 25 (1) is limited to billings generated by a member from the provision by the member of private medical services; and
(c) the actual income referred to in subsection 25 (3) is limited, for the purpose of the calculation of gross indemnity costs and payment of subsidy, to the income that relates to the provision by the member of private medical services.
Note 'Private medical services' is defined in section 52.
(2) Where a written offer to a member referred to in subsection (1) is later varied, the day the offer is taken to have been made for the purpose of subsection (1) is the day that the written offer was made.
(3) If a contractor does not make a written offer to provide medical indemnity cover but a contract to provide such cover is entered into on or after 1 January 2008, subsection (1) applies as if that contract had been a written offer.
Part 5 Advance subsidy
26. Application for advance subsidy
(1) A contractor may apply to the Chief Executive Medicare to be paid an advance subsidy on behalf of an eligible member for a premium period beginning on or after 1 January 2004.
(2) An application for an advance subsidy to be paid on behalf of an eligible member for a premium period must be made no later than 2 months after the end of that premium period. In this subsection, ‘premium period’ does not include part of a premium period.
Note If a contractor does not make an application for an advance subsidy under this Part based on estimated income an application may be made under Part 6 when the member’s actual income is known, but an application under Part 6 cannot be made later than 12 months after the end of the premium period.
(3) If an application is made under section 32, an application cannot be made under this section in respect of the same member for the same period.
(4) An application must be in a form, or in another manner, approved by the Chief Executive Medicare.
27. Payment of advance subsidy
(1) Subject to this Scheme and the conditions in the PSS contract, the Chief Executive Medicare must pay to a contractor a subsidy under this Part on behalf of an eligible member for a premium period on or after 1 January 2004 if:
(a) the eligible member is eligible for a subsidy under Part 3; and
(b) the contractor has complied with the conditions specified in this Scheme, other than conditions in relation to actual income; and
(c) the contractor has calculated in accordance with this Scheme the amount of subsidy payable, but, for the PSS calculation, the calculation is based on estimated income (the amount of advance subsidy); and
(d) the contractor has applied to the Chief Executive Medicare for payment of the amount of advance subsidy in accordance with section 26 or 28; and
(e) the Chief Executive Medicare has no reason to believe at the time of receiving the application for advance subsidy that the information provided is false or inaccurate.
(2) A calculation by a contractor that a member is not eligible for an advance subsidy is deemed for the purpose of subsection 47 (1) to be a decision of the Chief Executive Medicare that the member is not an eligible member.
(3) The Chief Executive Medicare must make a payment of advance subsidy under this section in accordance with the manner and within the timeframe set out in the PSS contract, or otherwise as soon as practicable after receiving the application.
28. Adjustments of advance subsidy
(1) Where a contractor has received an advance subsidy on behalf of a member for a premium period and:
(a) there has been a change in the member’s circumstances during any part of that premium period; or
(b) the information on which the amount of advance subsidy was calculated was not correct or has changed,
the contractor must recalculate the amount of advance subsidy based on the new information and apply to the Chief Executive Medicare for an adjustment in accordance with the conditions and requirements of the PSS contract.
(2) An application for an adjustment under this section must be in a form, or in another manner, approved by the Chief Executive Medicare.
(3) If the amount calculated in accordance with this section is less than the amount of advance subsidy to which the adjustment relates, the difference is a debt due to the Commonwealth from the contractor.
(4) If the amount calculated in accordance with this section is more than the amount of advance subsidy to which the adjustment relates, the Chief Executive Medicare must pay the difference to the contractor as an advance subsidy, but the Chief Executive Medicare may offset that amount against other amounts due from the contractor to the Chief Executive Medicare under this Scheme.
(5) Notwithstanding anything in the PSS contract, applications for adjustment must be made as soon as practicable or otherwise within the timeframe notified in writing by the Chief Executive Medicare to the contracted insurer.
29. Reconciling amounts paid
(1) Subject to subsection (2), where a contractor has received an advance subsidy on behalf of a member, the member must provide, by way of a statutory declaration, to the contractor within 12 months of the end of a premium period to which the subsidy relates, the information as required by the contractor on the member’s actual income (including a zero amount) for the premium period, or, if the member has changed categories during the premium period, for each of the parts of the premium period to which the subsidy relates.
(2) If a member with a MISS entitlement or a rural procedural general practitioner does not provide the statutory declaration referred to in subsection (1), section 22 applies to that member in calculating the determination of final subsidy.
(3) A contractor which has been paid an advance subsidy on behalf of a member for a premium period must make an application under section 31 (whether or not the contractor believes a subsidy is payable under that Part):
(a) as soon as practicable after receiving the member’s statutory declaration referred to in subsection (1); or
(b) for members with a MISS entitlement or rural procedural general practitioners who express their intention not to provide a statutory declaration, as soon as practicable after becoming aware of that information; or
(c) for members with a MISS entitlement or rural procedural general practitioners who have not expressed their intention not to provide a statutory declaration and have not done so within the 12-month timeframe for providing the statutory declaration, as soon as practicable after the 12-month timeframe; or
(d) otherwise in accordance with the timeframes specified in the PSS contract.
30. Failure to make application or provide information
If a contractor which has been paid an advance subsidy on behalf of a member for a premium period does not make an application under section 31 or cannot do so because the member (other than a member with a MISS entitlement or a rural procedural general practitioner) has not provided the statutory declaration referred to in subsection 29 (1):
(a) the amount of advance subsidy paid under this Part for that member for that period is taken to have been incorrectly paid; and
(b) the amount incorrectly paid is a debt due from the contractor to the Commonwealth; and
(c) the member must pay the full amount of the premium for that premium period to the contractor.
Note If a PSS contract is no longer in force, the former contractor must still comply with this requirement – see section 39.
Part 6 Final determination of subsidy
31. Application where advance subsidy paid
Where:
(a) a contractor has received payment of an advance subsidy under Part 5; and
(b) if subsection 29 (1) requires the member to whom the subsidy relates to give a statutory declaration to the contractor and the member has done so;
the contractor must apply to the Chief Executive Medicare under this Part for a final determination of the subsidy.
Note If an application is not made or cannot be made because the member has not provided the statutory declaration, the amount of advance subsidy must be repaid – see section 30.
32. Application where advance subsidy not paid
(1) A contractor who has not made an application under Part 5 for payment of an advance subsidy on behalf of an eligible member may apply to the Chief Executive Medicare for payment of a subsidy under this Part on behalf of the eligible member for a premium period beginning on or after 1 January 2004.
(2) Subject to subsection (4), an application cannot be made under this section unless the member has provided, by way of a statutory declaration, to the contractor within 12 months of the end of the premium period to which the subsidy relates, the information as required by the contractor on the member’s actual income (including a zero amount) for the premium period, or, if the member has changed categories during the premium period, for each of the parts of the premium period to which the subsidy relates.
(3) The application must be made within the same timeframes as mentioned in subsection 29 (3).
(4) If a member with a MISS entitlement or a rural procedural general practitioner does not provide the statutory declaration referred to in subsection (2), section 22 applies to that member in calculating the determination of final subsidy.
33. Form of application
(1) An application under this Part must be in a form, or in another manner, approved by the Chief Executive Medicare.
(2) The application must be accompanied by:
(a) a statement of the amount of subsidy, calculated by the contractor in accordance with this Scheme, to which the member was or is entitled; and
(b) any other document or information required by the PSS contract.
34. Determination where advance subsidy paid
(1) As soon as practicable after receiving an application under section 31, the Chief Executive Medicare must determine, in accordance with this Scheme and taking account of the information received in the application and any other relevant information:
(a) whether the contractor was entitled to receive on behalf of the member the amount of advance subsidy paid under this Scheme; and
(b) if so, the amount of subsidy that the contractor was entitled to receive on behalf of that member.
(2) If the Chief Executive Medicare determines that the amount of subsidy the contractor was entitled to receive is greater than the amount of advance subsidy paid under Part 5, the Chief Executive Medicare must pay to the contractor as a subsidy under this Scheme the difference between the amount paid under Part 5 and the amount of subsidy determined by the Chief Executive Medicare under this Part.
35. Repayment of advance subsidy
If the Chief Executive Medicare determines under section 34 that the amount of subsidy the contractor was entitled to receive on behalf of the member is less than the amount of advance subsidy paid under Part 5, or the Chief Executive Medicare determines that no subsidy is payable, for the premium period to which the advance subsidy relates:
(a) the contractor must pay to the Chief Executive Medicare an amount equivalent to the difference between the advance subsidy paid and the amount determined by the Chief Executive Medicare under this Part, or the whole amount of the subsidy, as the case may be; and
(b) that amount is a debt due to the Commonwealth from the contractor.
36. Determination where no advance subsidy paid
(1) Subject to this Scheme, if an application is made under section 32, the Chief Executive Medicare must determine the amount of subsidy payable to the contractor on behalf of the eligible member for the premium period, but only if:
(a) the eligible member is eligible for a subsidy under Part 3; and
(b) the contractor has complied with the conditions specified in this Scheme; and
(c) the contractor has calculated in accordance with this Scheme the amount of subsidy payable; and
(d) the Chief Executive Medicare has no reason to believe at the time of receiving the application that the information provided is false or inaccurate.
(2) A calculation by a contractor that a member is not eligible for a subsidy under this section is deemed for the purpose of subsection 47 (1) to be a decision of the Chief Executive Medicare that the member is not an eligible member.
37. Time for making payments of subsidy
The Chief Executive Medicare must make a payment of a subsidy under this section in accordance with the manner and within the timeframe set out in the PSS contract, or otherwise as soon as practicable after the determination has been made.
38. Incorrect payments
If, after making a determination under section 34 or subsection 36 (1), the contractor informs the Chief Executive Medicare or the Chief Executive Medicare otherwise becomes aware that:
(a) the medical practitioner was not eligible or has ceased to be eligible for a subsidy, or part thereof, on his or her behalf; or
(b) the subsidy, or part thereof, was otherwise incorrectly paid,
that amount of subsidy paid, either as an advance subsidy under Part 5 or final subsidy under this Part, is a debt due from the contractor to the Commonwealth.
39. Former contractors
If a PSS contract is terminated or expires, this Scheme, other than section 26 and section 32, applies to the parties to that PSS contract for the purposes of adjusting or reconciling amounts paid on behalf of an eligible member as if:
(a) references to a ‘contractor’ were references to a ‘former contractor’; and
(b) the member on whose behalf the subsidy is to be paid or repaid, or in respect of whom an application must be made under sections 31 or 32, continued to have a contract of insurance providing medical indemnity cover with the contracted insurer in the same terms as when the PSS contract was in force.
Part 7 Conditions for contractors
40. Conditions to be satisfied
For a subsidy to be payable to a contractor on behalf of an eligible member for a premium period, the contractor must comply with the following conditions:
(a) before each premium period, the contractor must inform a member who gives his or her consent to the contractor to participate in this Scheme:
(i) whether the member is an eligible member at that time; and
(ii) the amount of the premium;
(iii) the amount of the premium that the member must pay directly to the contractor; and
(iv) the amount, including a zero amount, the contractor has calculated as the amount of subsidy or advance subsidy payable by the Chief Executive Medicare, subject to this Scheme, in respect of that member and the method by which that amount was calculated; and
(v) any other information required by the PSS contract;
(b) the premium must be:
(i) calculated taking into account any amounts receivable by the contracted insurer from the Commonwealth or the Chief Executive Medicare under the Act, but not any payment made, or to be made at any time, under this Scheme or the MISS; and
(ii) calculated using methodology that:
(A) complies with applicable Laws; and
(B) does not take into account the possible application of this Scheme to a member; and
(c) the contractor must keep records relevant to the premium payable by a medical practitioner and the calculation of subsidy paid on behalf of an eligible member for five years from the day on which the records were created; and
(d) the contractor must comply with all applicable Laws in respect of contracts of insurance; and
(e) the contractor must comply with the conditions set out in the PSS contract for the payment of subsidy on behalf of members under this Scheme.
Part 8 Administration fee
41. Eligibility
A contractor is eligible to be paid a subsidy under this Scheme calculated in accordance with section 43 (the administration fee) to help the contractor meet the cost of administering this Scheme for a premium period, if the contractor complies with the conditions for payment of an administration fee in this Scheme and the PSS contract.
43. Calculation
(1) Subject to subsection 6, the administration fee payable to a contractor for the financial year commencing 1 July 2013, whether or not paid proportionally over that year, is the sum of:
(a) the base fee; and
(b) an additional amount determined to be reasonable by a responsible officer, having regard to the number of the contractor’s members in respect of whom a run-off cover support payment is attributable as at 31 May 2013 as a proportion of the total number of all contracted insurers’ members in respect of whom a run-off cover support payment is attributable as at 31 May 2013.
(2) The administration fee payable to a contractor in respect of each financial year commencing on or after 1 July 2014 is the administration fee payable to that contractor in the immediately previous financial year plus an indexation amount for the current financial year, where indexation amount means an amount determined by a responsible officer, having regard to indices in respect of the current financial year that are provided by the Department of Finance and Deregulation to the Department for the purposes of funding increases.
(3) A responsible officer may consult with the Chief Executive Medicare and any other relevant person or agency when calculating an amount under this Part.
(4) An administration fee payable in accordance with this Part constitutes a payment in respect of all costs, including any expenses, disbursements, levies and taxes (including GST), incurred by the contractor in carrying out its obligations under this Scheme for the financial year to which the payment relates.
(5) In this section, run-off cover support payment has the same meaning as in the Medical Indemnity (Run-off Cover Support Payment) Act 2004.
(6) Where a medical indemnity insurer and an MDO are both parties to the same PSS contract, for the purposes of calculating the administration fee under subsection 43(1) the insurer is taken to be the only contractor.
44. Determination
Where the responsible officer determines an additional amount under paragraph 43(1)(b) in respect of a contractor, the responsible officer must notify the Chief Executive Medicare as soon as practicable of that amount.
45. Payment
The Chief Executive Medicare must pay to the contractor, in accordance with the requirements of the PSS contract, the amount of the administration fee calculated in accordance with this Part within the timeframe set out in the PSS contract.
46. Non-compliance with conditions
(1) If a responsible officer becomes aware, after an administration fee has been paid to a contractor, that the contractor has not complied with the conditions for the payment of the administration fee for the period to which the administration fee relates, a responsible officer may determine that the fee was incorrectly paid.
(2) If a responsible officer makes a determination referred to in subsection (1), the amount of the fee paid is a debt due to the Commonwealth from the contractor.
Part 9 Miscellaneous
47. Review of decisions
(1) In this section, reviewable decision means:
(a) a determination of the Chief Executive Medicare under section 34; or
(b) a deemed decision under subsection 27 (2) or 36 (2); or
(c) a determination of a responsible officer under Part 8.
(2) A medical practitioner (the applicant) affected by a reviewable decision referred to in paragraphs (1) (a) or (b) may seek review of the decision (the original decision) by a Departmental employee (within the meaning of the Human Services (Medicare) Act 1973) authorised by the Chief Executive Medicare (the reviewing officer).
(3) A contractor (the applicant) affected by a reviewable decision referred to in paragraphs (1) (a) or (c) may seek review of the decision (the original decision):
(a) for a decision referred to in paragraph (1) (a), by a Departmental employee (within the meaning of the Human Services (Medicare) Act 1973) authorised by the Chief Executive Medicare (the reviewing officer); or
(b) for a decision referred to in paragraph (1)(a) made by the Chief Executive Medicare or a decision referred to in paragraph 1(c) made by a person mentioned in paragraph (a) of the definition of responsible officer, a person mentioned in paragraph (b) of that definition (the reviewing officer); or
(c) for a decision referred to in paragraph (1)(c) made by a person mentioned in paragraph (b) of the definition of responsible officer, a Deputy Secretary of the Department (the reviewing officer).
(4) A Departmental employee (within the meaning of the Human Services (Medicare) Act 1973) must not be authorised as a reviewing officer unless the employee has a classification higher than the classification of the official who made the original decision.
(5) The reviewing officer must:
(a) confirm the original decision; or
(b) substitute the original decision with another decision.
(6) The reviewing officer must give to the applicant:
(a) a notice in writing stating the outcome of the review; and
(b) the reasons for the decision.
(7) The applicant may apply to the Administrative Appeals Tribunal for review of the reviewing officer’s decision.
Note Under section 27A of the Administrative Appeals Tribunal Act 1975, the decision-maker must give to any person whose interests are affected by the decision notice, in writing or otherwise, of the making of the decision and of the person’s right to have the decision reviewed.
(8) Where a medical practitioner applies for review of a reviewable decision under subsections (2) or (7), the amount of the premium is not reviewable.
Note The PSS contract is to provide for dispute-resolution processes (see section 8 of this Scheme).
48. Information obtained by the Chief Executive Medicare
In assessing whether:
(a) a member is an eligible member and, if so, the amount of subsidy or advance subsidy payable in respect of that member; or
(b) a contractor is eligible for an administration fee and the amount of that fee,
the Chief Executive Medicare or a responsible officer, as the case may be, may have regard to:
(c) any relevant information obtained under section 44 of the Act; and
(d) any relevant information obtained by the Chief Executive Medicare or the Department; and
(e) any information in the possession of the Department or the Chief Executive Medicare, including information linked to the medical practitioner’s provider number; and
(f) any other relevant information.
49. Disclosure of information
(1) For the purpose of administering, assessing and reviewing the operation of this Scheme or the PSS contract, the Chief Executive Medicare, the Department, APRA and contractors may exchange information and data which they have respectively obtained under this Scheme, other relevant legislation, the PSS contract or the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003.
(2) For the purposes of administration of this Scheme, a contractor must provide to the Chief Executive Medicare or the Department such information, including personal information, as is required or requested by the Chief Executive Medicare or the Department.
50. Offsetting debts
Any debt due from the contractor to the Commonwealth under this Scheme:
(a) is recoverable by the Chief Executive Medicare on behalf of the Commonwealth; and
(b) may be offset by the Chief Executive Medicare against any other amount payable to the contractor under this Scheme.
51. Repayment of subsidy by a medical practitioner
If a contractor is required under this Scheme to repay to the Chief Executive Medicare a subsidy paid on behalf of a medical practitioner, the medical practitioner to whom the subsidy relates must pay to the contractor the amount of the repayment, being the premium, or part of the premium, due from the medical practitioner to the medical indemnity insurer.
Note The medical practitioner will not be eligible for any subsidy while the amount is outstanding – see subsection 11 (1).
Part 10 General list of definitions
52. Definitions
Note Some terms used in this Scheme are defined in the Act, including:
contribution year
Chief Executive Medicare
MDO
medical indemnity cover
medical indemnity insurer
medical practitioner
medicare benefit
Secretary.
In this Scheme, unless the contrary intention appears:
Act means the Medical Indemnity Act 2002 as amended from time to time.
actual income means the amount calculated under section 25.
APRA means the Australian Prudential Regulation Authority established by the Australian Prudential Regulation Authority Act 1998.
Australia includes an external Territory.
base fee means a fee of $250,000 paid to a contractor in respect of meeting the obligations imposed on it by this Scheme.
contracted insurer means a medical indemnity insurer which is a party to a PSS contract that is in force.
contracted MDO means an MDO which is a party to a PSS contract that is in force.
contractor means a contracted insurer or a contracted MDO.
deferred payment day has the same meaning as under section 62 of the Act.
Department means the Department of Health and Ageing.
eligible member has the meaning given by section 12.
estimated income means a reasonable estimate by the medical practitioner of his or her income for the premium period, calculated in the same manner as for actual income under section 25.
general practitioner has the same meaning as under subsection 3(1) of the Health Insurance Act 1973.
gratuitous services means medical services provided free of any charge or other benefit and include without limitation good Samaritan acts or omissions, volunteer services and prescription and referral writing.
gross indemnity costs means an amount calculated in accordance with section 24.
GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act 1999.
Law means any applicable Commonwealth, State or Territory statute, regulation, or subordinate legislation in force from time to time.
lowest base premium, in respect of a non-procedural general practitioner referred to in paragraph 15 (1) (b), means the lowest premium, including any discount but excluding any risk surcharge, within the meaning of that term in section 24, available from the contracted insurer to a non-procedural general practitioner who is in the same income band and practises in the same specialty.
member means a medical practitioner who has a contract of insurance providing medical indemnity cover with a contracted insurer or, where the context permits, a former contracted insurer.
member with a MISS entitlement has the meaning given by subsection 12 (2).
membership fees means, in respect of a member, fees charged by an MDO associated with the contracted insurer for membership services.
MISS means the Medical Indemnity Subsidy Scheme 2003 formulated under subsection 43(1) of the Medical Indemnity Act 2002, as in force at 30 June 2004.
MISS calculation means the amount calculated under the Schedule.
non-therapeutic cosmetic procedure means a procedure that is cosmetic in nature and is not a professional service mentioned in the general medical services table under the Health Insurance Act 1973 or a health service specified in a determination made under subsection 3C(1) of that Act.
payment day has the same meaning as under section 61 of the Act.
personal information has the same meaning as in the Privacy Act 1988.
premium, for a medical indemnity cover policy, means the amount assessed by the contracted insurer, in accordance with the conditions in the PSS contract, which indemnifies the medical practitioner against claims arising from the practitioner's medical practice, including legal action by third parties.
premium period means the period for which the contractor collects the premium, as specified in the PSS contract.
private medical service, of a member, means a medical service provided by the member to a patient on a private (not public) basis and for which the member either holds medical indemnity cover (in his or her own name) with the contracted insurer or for which the member is personally liable.
procedural general practitioner means a general practitioner, who is liable to pay a premium for medical indemnity cover for procedural general practice, including a vocationally or non-vocationally registered general practitioner, overseas-trained doctor or other medical practitioner (including a medical practitioner undertaking a placement as a procedural general practitioner registrar in the course of a training program conducted by or on behalf of General Practice and Educational Training Limited) whose practice includes the non-referred provision of professional services mentioned in the general medical services table under the Health Insurance Act 1973, or health services specified in a determination made under subsection 3C(1) of the Health Insurance Act 1973, of one or more of the following types:
(a) administration of anaesthetic;
(b) surgical procedures for which hospital facilities are or would normally be required;
(c) obstetric procedures;
(d) accident and emergency medicine;
(e) invasive medical procedures, except the administration of Implanon,
but does not include a medical practitioner who is charged a premium higher than the premium charged to non-procedural general practitioners solely because of the performance of non-therapeutic cosmetic procedures.
PSS calculation means the amount calculated under section 14.
PSS contract means a contract authorised by section 7.
public sector organisation means an entity whose primary function is to provide health services to the public at no charge. Public sector organisation may include, without limitation, a State or Territory government department, a public hospital, an area health service or a public health clinic where the entity's primary purpose is to provide health services to the public at no charge.
responsible officer means a person for the time being holding or occupying the position of:
(a) the Assistant Secretary of the Branch of the Department which has responsibility for administering the Scheme; or
(b) the First Assistant Secretary of the Division of the Department which has responsibility for administering the Scheme.
retroactive cover means, for a medical practitioner and a contracted insurer, claims-made based cover for the medical practitioner in relation to claims that may be made in respect of incidents occurring prior to the inception of the practitioner's current medical indemnity cover.
run-off cover means medical indemnity cover for a medical practitioner in relation to compensation claims that may be made against the person:
(a) after the insurer or MDO ceases to provide claims-made based cover to the person; and
(b) in respect of acts or omissions occurring before the first contract for provision of the cover takes effect,
but does not include medical indemnity cover of the type referred to in subsections 12 (7) or (8).
rural area means a rural or remote area in levels 3 to 7 of the Rural, Remote and Metropolitan Areas Classification.
rural calculation means the amount calculated under section 15.
rural procedural general practitioner means a member who is a procedural general practitioner practising in a rural area.
Rural, Remote and Metropolitan Areas Classification means the document so titled, as in force on 1 January 2001, setting out certain categories of areas in Australia that have been determined by the Department by reference to population size and remoteness of locality on the basis of 1991 census data published by the Australian Bureau of Statistics in 1994.
subsidy means a subsidy payable under this Scheme.
State includes Territory.
vocationally registered general practitioner has the meaning given under section 3F of the Health Insurance Act 1973.
Schedule
1. MISS methodology
The methodology for the purpose of section 17 is as set out in this Schedule.
2. Interpretation
In this Schedule, unless the contrary intention appears:
corresponding medical practitioner, in relation to a neurosurgeon, procedural general practitioner or specialist obstetrician, means a general surgeon, non procedural general practitioner or gynaecologist, respectively:
(a) who has the same insurer, or is a member of the same MDO, as the neurosurgeon, procedural general practitioner or specialist obstetrician; and
(b) whose medical practice is within the same geographical area (that is, the State, Territory or other area recognised by the insurer or MDO for the purpose of determining premiums) as the neurosurgeon, procedural general practitioner or specialist obstetrician; and
(c) who is classified by that insurer or MDO within the equivalent income band (or demonstrates other parallel characteristics) as the neurosurgeon, procedural general practitioner or specialist obstetrician.
neurosurgeon means:
(a) a medical practitioner who:
(i) is a fellow of the Royal Australasian College of Surgeons; and
(ii) is identified by the College as belonging to the surgical specialty area of neurosurgery; or
(b) a medical practitioner who is a member of the Neurosurgical Society of Australasia.
premium means the premium payable for relevant indemnity insurance, but excludes any component of the amount payable that is attributable to GST, stamp duty or any additional charge that relates to the practitioner’s prior claims history. The premium must be determined in accordance with Part 7 of this Scheme.
relevant indemnity means an indemnity from claims arising in relation to the practitioner’s practice of his or her medical profession:
(a) that covers the provision of medicare-billable services in the practitioner’s principal field of practice; and
(b) that does not include run-off cover or retroactive cover; and
(c) the premium, for which, because of the practitioner’s practice as a neurosurgeon, specialist obstetrician or procedural general practitioner, is greater than the premium that a corresponding medical practitioner would have to pay for an equivalent indemnity.
If an indemnity that includes run-off cover or retroactive cover would otherwise be a relevant indemnity under this definition, the component of the relevant indemnity that is not run-off cover or retroactive cover is a relevant indemnity.
specialist obstetrician means a medical practitioner who is recognised by the Royal Australian and New Zealand College of Obstetricians and Gynaecologists as a specialist obstetrician.
3. Neurosurgeons
The MISS calculation for a neurosurgeon in respect of a premium payable by the neurosurgeon is:
(a) if the total amount of the premium for the premium year is $50,000 or less and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates (the corresponding amount) is less than $50,000 — 50% of the difference between the amount of the premium and the corresponding amount; or
(b) if the total amount of the premium for the premium year is more than $50,000, and the corresponding amount is less than $50,000 — the sum of the following amounts:
(i) 80% of the amount by which the total premium exceeds $50,000;
(ii) 50% of the difference between $50,000 and the corresponding amount; or
(c) if the total amount of the premium for the premium year is more than $50,000 and the corresponding amount is $50,000 or more — 80% of the difference between the total amount of the premium and the corresponding amount.
4. Specialist obstetricians
The MISS calculation for a specialist obstetrician in respect of a premium payable by the obstetrician is:
(a) for a specialist obstetrician who provides services in a rural or remote area within the meaning of the Rural, Remote and Metropolitan Areas (RRMA) Classification — 80% of the difference between the amount of the premium and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates; and
(b) for any other specialist obstetrician — 50% of the difference between the amount of the premium and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates.
5. Procedural general practitioners – non-rural
The MISS calculation for a procedural general practitioner not practising in a rural area in respect of the premium payable by the procedural general practitioner is 50% of the difference between the amount of the premium and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates.
6. Procedural general practitioners – rural
The MISS calculation for a procedural general practitioner practising in a rural area in respect of the premium payable by the procedural general practitioner is 75% of the difference between the amount of the premium and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates. This is a new provision that was not in the MISS, to cover procedural general practitioners practising in a rural area with a MISS entitlement.
7. Procedural general practitioner registrars
The MISS calculation for a procedural general practitioner registrar in respect of the premium payable by the registrar is 80% of the difference between the amount of the premium and the amount that a corresponding medical practitioner would have had to pay to meet the costs to which the premium relates.
In this item, procedural general practitioner registrar means a procedural general practitioner undertaking a placement as a procedural general practitioner registrar in the course of a training program conducted by or on behalf of General Practice and Educational Training Limited.