Some terms used in Medical Indemnity insurance claims have specific meanings depending on which scheme they apply to.
Aggregation An amount formed or calculated by the combination of many separate items. For the purposes of ROCS and HCCS where both an MDO and an MII have paid, or are liable to pay amounts in relation to the same member or policy holder in respect of the same claim, they may aggregate those costs and make a single application for payment.
Where the application relates to amounts paid or payable by both an MDO and an MII in relation to the same claim, and the MII elects to aggregate the amounts, the MDO must lodge the application (See section 31 (for HCCS) or 34ZE (for ROCS) of the Medical Indemnity Act 2002).
Appeal A petition by an unsuccessful party in a lawsuit or administrative proceeding to an appropriate superior court on the grounds that it was based upon an erroneous application of law.
Applicant The entity applying for a payment. The applicant must be a:
a) Medical Defence Organisation (MDO)
b) Medical Indemnity Insurer (MII), or
c) MDO or MII in external administration
Apportionment The distribution of damages between parties to a claim, proportionate to their legal liability. For the purpose of assessing a Medical Indemnity payment application the Department of Human Services requires this information in writing.
Approved application form A Medical Indemnity payment application approved by the Chief Executive Medicare under the Medical Indemnity Act 2002.
Claim Please refer to section 4 of the Medical Indemnity Act 2002 for a full definition.
a) A claim or demand of any kind (whether or not involving legal proceedings), and
b) Proceedings of any kind including:
- proceedings before an administrative tribunal or of an administrative nature, and
- disciplinary proceedings (including disciplinary proceedings conducted by or on behalf of a professional body), and
- an inquiry or investigation
c) Notification of an incident to an MDO or MII by or on behalf of a medical practitioner.
Claim against a person Includes an inquiry into, or an investigation of, the person’s conduct, or notification of an incident as above.
Claim for contribution A claim by a party to an action or proceeding to recover a portion of his or her liability from another party who is also liable for the same damage to the plaintiff.
Claim handling fee An administrative cost which is payable under the ROCS and IBNR Schemes at 5% of the gross claim amount. When a Medical Indemnity refund application is submitted and approved, any claims handling fee previously paid will be reviewed and possibly reduced.
[Department of Human Services] claim identifier The claim identifier which is unique for each Medical Indemnity claim made against a medical practitioner.
Civil Action A lawsuit brought to enforce, redress, or protect rights of private litigants the plaintiffs and the defendants, not a criminal proceeding.
Civil Claim A civil claim is a formal complaint made against one or more parties in a non-criminal that is, non-penal court. It is a suit recognising a dispute between private individuals or corporations.
Consent judgment A court decision or document which embodies the settlement terms agreed upon by the parties to proceedings and is filed in court. Unless set aside or varied, a consent judgment is the final disposition of proceedings. For the purpose of assessing a Medical Indemnity payment application or refund the Department of Human Services need this information in writing.
Costs The fees, charges, disbursements and expenses incurred in connection with legal work undertaken in relation to the proceeding (by either plaintiff or defendant).
Costs order An order of a court or tribunal to pay the costs. These orders are generally made against an unsuccessful party in favour of a successful party. Courts generally have power to determine by whom, and to what extent, costs are to be paid by an unsuccessful party.
Cost sharing arrangement Any arrangement in which legal costs and/or disbursements are to be shared between parties to a claim or proceedings.
Costs inclusive settlement A settlement that includes an unspecified amount for the plaintiff’s legal costs and disbursements. If unspecified, these costs are to be claimed entirely under the ‘judgment or settlement’ amount.
Coronial inquest An inquest or inquiry held before a coroner concerning the death or suspected death of a person.
Date eligible for ROCS The first date on which the member or policy holder met one of the ROCS eligibility criteria, under which they were still eligible at the time of notification.
Deed of Release An agreement, in the form of a deed, finalising a claim brought by a plaintiff against a defendant. A deed prevents a further claim for damages being brought against the medical practitioner.
Damages Compensation for loss or injury suffered by a plaintiff or claimant as a consequence of an incident involving a defendant.
Date of Incident An incident needs to be an act, omission or circumstance that is claimed to have occurred.
The date of incident is the date on which the incident occurred that gave rise to a claim. If it is not possible to identify a single significant incident date, the claim should reflect a date range of the alleged dates of the incidents.
For claims to be considered eligible, the Department of Human Services must receive evidence of the date of the incident(s). Documentation can include:
- a copy of the full statement of claim or writ; including personal injury proceedings (PIPA) notifications
- a doctor’s treatment notes (clinical patient notes)
- a police report
- a medical board enquiry
- a coronial inquest
- a health care complaints commission request
- an investigation notice (e.g. AHPRA)
Date of Notification The date that the applicant was first notified of the claim or incident(s):
- by the member or policy holder, or
- through a subpoena, statement of contribution from another party, or other claim documentation
All applications for payment must be supported by evidence demonstrating when the MDO or MII was notified. These may include:
- a written notification from the member or policy holder
- a letter of demand
- a third party claim or notice of contributions
- correspondence or file notes relating to verbal notifications of an incident
Deductibles Specified amounts a member or policy holder is required to pay towards each claim. Also known as excess or exceeds. A member or policy holder may also choose an excess in an effort to reduce their annual premium.
Defence costs Legal costs, fees, charges, disbursements and expenses incurred by or on behalf of the defendant(s) to a claim.
Defendant A person against whom civil proceedings are brought.
Discontinuance of proceedings A method used to end court proceedings. A document must be filed with the court, discontinuing proceedings it that forum. For the purposes of assessing a Medical Indemnity payment application the Department of Human Services require this information in writing.
Estimated outstanding liability The estimated future reserve for the costs or damages to be incurred in connection with the claim against the member or policy holder. This should not include any payments in relation to the claim prior to submitting the Medical Indemnity payment application.
Excess or Exceeds Specified amounts a member or policy holder is required to pay towards each claim. A member or policy holder may also choose an excess in an effort to reduce their annual premium. Also known as deductibles.
Exceptional Claim Scheme (ECS) A scheme designed to assist where a claim exceeds a medical practitioner’s indemnity insurance contract limit. The current thresholds legislated in the Medical Indemnity Act 2002 are:
a) if the MII was first notified of the claim, or facts that might give rise to a claim, on or after 1 January 2003 and before 1 July 2003 - $15 million
b) if the MII 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
External administration A term which covers all types of insolvency arrangements including voluntary administration or liquidation.
GST Goods and Services Tax (GST) that can’t be claimed back as an input tax credit. GST amounts are not claimable on defence costs.
HCCS High Cost Claim Indemnity Scheme
HCCS threshold The amount that a claim must exceed before a HCCS application can be lodged. The applicable threshold is determined by the earliest date the claim or the incident which gives rise to a claim was notified to the MDO or MII. The HCCS threshold is fixed within the Medical Indemnity legislation and reflects the notification date the MDO or MII was first notified of:
- an incident that gave rise to a claim, or
- a claim against the member or policy holder
High Cost Claims Scheme thresholds
|Notification date||Applicable threshold|
|1 January 2003 to 21 October 2003 (inclusive)||$2,000,000|
|22 October 2003 to 31 December 2003 (inclusive)||$500,000|
|1 January 2004 to 30 June 2018 (inclusive)||$300,000|
|On or after 1 July 2018||$500,000|
IBNR Incurred But Not Reported Indemnity Scheme
IBNR Protocols The Medical Indemnity (IBNR) Claims Protocol 2006 determined by the Minister under section 27A of the Medical Indemnity Act 2002.
Identification number The unique identification number allocated by the MDO or MII to the member or policy holder who is the subject of the claim.
Indemnify A person indemnifies someone else by either making a payment or agreeing to make a payment in the event that the person indemnified is liable for losses or damages.
Indemnity Protection or security against damages or loss.
Incident An act, omission or circumstance. Includes an alleged incident.
Incident occurring based cover An arrangement that existed between an MDO and a person, on 30 June 2002, under which the MDO would, in the ordinary course of business, indemnify a person for incidents occurring within their period of membership. Incident occurring based cover is defined in greater detail in section 7 of the Medical Indemnity Act 2002.
Initial The first application submitted for a claim that the Department of Human Services will assess.
Insurer to insurer payment A payment that is made by an MDO or MII to an MDO or an MII, and is not made on behalf of another person, see section 4 of the Medical Indemnity Act 2002.
Insurance contract A contract whereby an insurer agrees to indemnify the purchaser up to a specified limit in the event of a claim against them.
Judgment The decision of a court, or a court order for the payment of compensation, costs or otherwise. A person will generally have a right to appeal to a higher court against a judgment of a lower court. Judgments do not become final until any and all appeal periods have expired.
Legal liability Obligations under law arising from civil actions or under contract. Legal liability can only be decided by courts even if the settlement is made out of the court by mutual agreement.
Legal personal representative One who represents or stands in the place of another under authority recognised by law
MDO Medical Defence Organisation defined by section 5 of the Medical Indemnity Act 2002 as:
a) a body corporate that is incorporated by or under a law of the Commonwealth, a state or territory, and
b) a body corporate that was in existence on 30 June 2002, and
c) a body corporate that, in the ordinary course of its business as at 30 June 2002, indemnified persons relating to claims in relation to incidents that occurred in the course of, or in connection with, the practice of a medical profession by a person provided that person was a member or former member of the body corporate or the legal personal representative of a member or former member of the body corporate.
Even if indemnity is provided at the discretion of the body corporate, if it comes within the scope of the above definition, the body corporate entity is an MDO for the purposes of the Medical Indemnity Act 2002.
Medical Indemnity cover In section 4 of the Medical Indemnity Act 2002, 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 covers 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
A single contract of insurance may provide medical indemnity cover for more than 1 person.
MII Medical Indemnity Insurer in section 4 of the Medical Indemnity Act 2002. An MII is a body corporate that is authorised to carry on insurance business in Australia under the Insurance Act 1973, or a Lloyds underwriter, and in carrying on that business enters into contracts of insurance to provide medical indemnity cover.
Medical practitioner In section 4 of the Medical Indemnity Act 2002, a person registered or licensed as a medical practitioner under a state or territory law that provides for registration or licensing of medical practitioners or a person who has been a medical practitioner.
Medicare provider number Medical practitioners apply for a Medicare provider number when they wish to have Medicare benefits payable for their services. Medicare provider numbers are allocated to medical practitioners to provide an easy method of identifying the place from which the service is provided.
Member A person who is a member or former member of an MDO.
Member or policy holder’s contract limit The maximum amount payable by the MII under a contract for claims made against a medical practitioner.
Ordinary course of business Refers to the day to day business of MDO and MII. In order to make a claim under the Medical Indemnity schemes, an MDO and MII needs to have made a payment in relation to a claim as part of their day to day business.
Payment made in relation to a claim A payment made to satisfy or settle a claim, or to meet legal or other expenses directly attributable to the claim, and only if the payment is made to meet legal and other expenses directly attributable to the claim.
Party or parties The person(s) or organisation(s) that make and/or respond to a claim.
Payment made in relation to a claim.
In subsection 4(3) of the Medical Indemnity Act 2002, an amount is a payment in relation to a claim if it is made to:
a) satisfy or settle a claim, or
b) meet legal or other expenses that are directly attributable to any negotiations, arbitration or proceedings in relation to the claim
Participating member A person who was a member of the MDO on 30 June 2000 (whether or not the person ceased to be a member of the MDO after that date).
Participating MDO As defined by section 11 of the Medical Indemnity Act 2002; as
a) an MDO is a participating MDO unless:
- the MDO was not in existence on 30 June 2002
- the Minister makes a determination that an MDO is not a participating MDO, the MDO is taken never to have been a participating MDO
Patient A person who is receiving or who is registered to receive medical treatment or a person who has received medical treatment.
Plaintiff A person or persons who commence civil action in a court.
Policy holder A person who held or holds a contract of insurance with an MII.
Policy number The unique identification number allocated by the MDO or MII to the member or policy holder who is the subject of the claim.
Private medical practice In subsection 34ZB(5) of the Medical Indemnity Act 2002, practice as a medical practitioner, other than:
a) practice consisting of treatment of public patients in a public hospital, or
b) practice for which:
- the Commonwealth, a state or a territory, or
- a local governing body, or
- an authority established under a law of the Commonwealth, a state or a territory indemnifies medical practitioners from liability relating to compensation claims (within the meaning of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003), or
c) practice conducted wholly outside both Australia and the external territories, or
d) practice of a kind specified in the regulations
Private Patient Patients who pay for their hospital expenses by private health insurance and/or their own funds.
Public Hospital A recognised hospital within the meaning of the Health Insurance Act 1973
Public patient Has the same meaning as in the Health Insurance Act 1973
Qualifying payments In HCCS, these are amounts paid or liable to be paid by an MDO or MII as defined by subsection 30(2) of the Medical Indemnity Act 2002.
Refund An amount identified by an MDO or MII that has been paid in error or that has been subsequently recovered and requires refunding to the Department of Human Services.
Registered business name Is simply a name or title under which a person, or other legal entity, trades. Your registered business name will be connected to your Australian Business Number (ABN).
Run off cover indemnity A run off cover indemnity paid or payable under Division 2B of Part 2 of the Medical Indemnity Act 2002. Amounts payable under the ROCS Protocol are not covered by this definition.
ROCS Run off Cover Indemnity Scheme.
ROCS Protocol The Medical Indemnity (Run-off Cover Claims and Administration) Protocol 2006, No. 2 (as amended and in force from time to time) determined by the Minister under section 34ZN of the Medical Indemnity Act 2002.
ROCS Reinsurance run off vehicle Assists any MDO or MII in respect of claims made against medical practitioners who have retired, have a permanent disability, are on maternity leave or who have permanently left private medical practice in Australia.
Remuneration To pay someone for work or services done. Payment may be in the form of money, gifts or other gratuities.
Series of related incidents The date range of the incidents that occurred that gave rise to the claim, or may give rise to a claim.
Settlement The compromise or resolution of a claim or dispute agreed to by the parties.
Specialty code The specialty that the member or policy holder was practising at the time the incident occurred.
Stay The act of temporarily stopping a judicial proceeding through the order of a court.
Statutory declaration You must use the ROCS statutory declarations to match you situation.
Subsequent An additional application submitted for a claim that the Department of Human Services has previously assessed.
Total amount relevant to the claim The total of previous payments relevant to the claim and the net application cost for the application.
Total application cost The total cost of the application once all deductibles have been subtracted.
Unrecoverable GST amount The amount of Goods and Services Tax (GST) that may not be claimed back as an input tax credit.