Medical indemnity - crisis averted

3 June, 2004

The AMA (WA) branch has made a series of significant breakthroughs in securing improved medical indemnity cover for Doctors working in the Public Health system. In 2003 AMA (WA) lobbied extremely hard to secure the first government indemnity cover for VMPs.

Since then AMA (WA) has kept the pressure on Government with continual lobbying to maintain and improve VMP indemnity cover.

Quite separately AMA (WA) has been negotiating to formalise the Government's indemnity cover for salaried practitioners.

Previously salaried doctors had relied on the benevolence of government for discretional indemnity cover, however, the AMA has sought to provide doctors with a detailed indemnity agreement that establishes their rights to indemnity before the need to utilise that cover arises.

As Doctors are well aware, indemnity arrangements have been of significant concern for more than a decade.

The previous inability of the government to provide Doctors with clearly articulated indemnity cover, teamed the insurance crisis, the subsequent near collapse of UMP and governmental accusations regarding alleged trust fund abuse, left Doctors with a sour taste and an overwhelming sense of concern and mistrust when considering indemnity reform and indemnity provided by the State.

The trust fund allegations, not surprisingly, rebounded on government when it was subsequently acknowledged the arrangements were imposed by management to derive income to compensate for inadequate funding to enable services to be maintained and reinforce the need for employer/government indemnity.

The government has decided that VMPs and salaried Doctors should be covered by the same form of indemnity agreement when providing services in the public sector.

VMPs will recognise that there are approximately 50 significant changes achieved in the new 2004 indemnity agreement when compared to the 2003 agreement.

Salaried doctors can also be assured that AMA (WA) has negotiated major changes to those proposed by the State for application to them.

AMA (WA) has been rigorously addressing the indemnity issue to ensure that doctors providing services under contracts with government will not again be placed in the situation where they are forced to withdraw their services for fear of inadequate indemnity cover.

It is expected the Health Department, in consultation with AMA (WA), will publish a set of questions and answers on the new agreement.

Salaried Doctors may call AMA with any queries, whilst VMPs may wish to seek legal advice prior to signing the 2004 Indemnity Agreement.

Following is a brief summary of the government's proposed Indemnity Agreement, however further information will be provided to members in the coming week:

Summary of Key Changes

1. Simplified Contractual Coverage

Unlike the Governments approach in relation to VMPs last year, requiring practitioners to sign individual Indemnity Agreements for each institution they attend, the 2004/2005 Indemnity Agreement is now between the practitioner and the Minister. This avoids the need to sign multiple agreements and automatically provides indemnity where the practitioner provides a locum at a new institution or commences a new appointment elsewhere covered by the Ministers contract.

2. Broad Application: Medical Negligence and Quality Activities

The Indemnity Agreement applies to medical negligence, consent, pre-operative anaesthetic examinations prior to any procedural intervention, participation in authorised clinical governance activities eg: MACs, clinical advisory committees and other quality improvement activities. In addition, greater flexibility is introduced into the agreement to cover other services approved by the hospital and or by agreement in writing between the Minister and the AMA to be indemnified. For other matters not covered, such as defamation served on a spokesperson for a hospital, the practitioner can apply under the agreement for cover/assistance under ancillary guidelines which also apply to Ministers and senior public servants.

3. More Certain Coverage

Compared to the document originally proposed by Government, the outcome provides far greater coverage reducing the flexibility of Government to seek to withdrawal or qualify the indemnity coverage referred to above. Importantly the exclusions have been significantly qualified, the presumption being that the practitioner will be indemnified for all medical services as defined unless the practitioners actions are reckless, malicious or carried out with wilful or intentional disregard of the consequences, criminal or another nature as detailed in the indemnity contract such that the practitioners acts or omissions invalidate his/her right to the indemnity. The presumption is the practitioner is indemnified unless the claims falls outside of the indemnity (such as defamation and certain private patient services). Another reason for exclusion from indemnity would result if the practitioners' actions are such as to override the practitioners' right to indemnity. Unlike the contract Government provided to VMPs last year which only required for such actions to be 'in any way' reckless, the new contract will now require that they 'are'. In addition, a review process has been incorporated into the agreement and strengthened from that informally secured after lobbying by the AMA last year and will function as a pre-emptive appeal mechanism.

4. Strengthen Process / Protection Against Exclusion or Withdrawal of Indemnity

Whilst the contract looks like a private medical defence organisation insurance contract which provides exclusions and capacity to withdraw in certain circumstances (for example see above. Clause 22 of the contract negotiated by the AMA and also being applied by Government for VMPs) it also provides a detailed review mechanism, in the event that consideration is given to excluding or withdrawing the indemnity as a consequence of abhorrent conduct by the Doctor. In addition to the Director Legal and Health Legislative Services with the Department of Health, the Department's Chief Medical Officer and a representative of the AMA (WA) nominated by the President the review panel will comprise a majority of medical practitioners who will after considering evidence, make a recommendation to the Minister who is obliged to have regard for the advice of the panel in making a decision.

5. Improved Consultative Process

The Agreement now provides a right to be advised on any claim or potential claims, having regard for the circumstances. A right to be consulted regarding any settlement of any claim where a practitioner is named a defendant which involves an admission of liability is also included in the agreement.

6. Provision for Addressing Conflicts of Interest / Separate Representation

Again after considerable difficulty, provisions have been obtained which allow the Minister to require the practitioner to be provided with independent legal representation, funded by the Minister, should the Minister be satisfied there is a conflict of interest between the practitioner and the employer in respect to the conduct of the claim or potential claim. Any disagreement in respect to this matter may be referred to the review panel.

7. Application to Private Patients

The AMA (WA) also lobbied hard to secure coverage for private patients in particular circumstances. As a consequence Government has determined that the indemnity agreement will apply to:

Private patients

1. Under Arrangement A.
2. North West Medical Practitioners exercising rights of private practice.
3. Rural Medical Practitioners generally admitting private patients.
4. By Doctors in Training treating private patients pursuant to their contract of employer / subject to Hospital Consultant authority.

The Agreement in this respect is expressed in terms of what is not covered. Doctors should carefully consult the agreement and seek clarification with their employer if need be.

8. Continuity of Indemnity - Holding Over

Last year, the VMP Agreement was time limited and legally expires on June 30 th 2004. The new agreement will, once entered into, continue indefinitely unless notice in writing is given by either the Minister or the Practitioner, or is either replaced by a new Indemnity Agreement or terminated with three months notice in writing given by the Minister.

9. Unlimited Continuing Cover (Blue Sky / Death Disabled and Retirement)

The feature secured after extensive lobbying last year and replicated in this year's agreement is that there is no limit on the amount of cover provided and should a Practitioner cease providing services the contract will apply to any future claim in respect to alleged acts or omissions covered during employment. The agreement also provides for retrospective cover for previous periods of employment and in certain circumstances while visiting Medical Practitioners.

10. Other Changes

There are numerous other changes the AMA (WA) has lobbied for or negotiated which will be the subject of detailed advice by distributed by either direct mail, on the AMA website or other communication channels.

In addition, details of the agreement will be further explained in a series of questions and answers which are being developed by the Health Department WA with AMA (WA). This information will be distributed with the proposed agreement shortly for your consideration. If acceptable to the Practitioner, the agreement should be signed and returned (but keep a copy).

The AMA has striven to maximise the quality and scope of the indemnity agreement and enhance the rights of medical practitioners under its provisions through ongoing negotiations with the Minister and detailed lobbying for VMPs and Salaried Practitioners with Departmental and legal representatives of the State's Solicitors office and representatives of the Minister. The resources which have been expended on members' behalf on this critically important issue have been considerable. It is recognised that there is considerable complexity to the agreement and once received Medical Practitioners will need to individually assess its acceptability and if appropriate seek independent legal advice on its suitability for their circumstances. In the meantime, members wishing to discuss the matter with the Association should contact either Mr Peter Jennings or Ms Meagan Bilston.