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GP facing indemnity increase of 12% despite MDDUS ‘price freeze’



Exclusive GPs are reporting annual indemnity premiums increase of more than £1,000 despite a ‘price freeze’ pledged by one of the UK’s main indemnity organisations.

The MDDUS announced last month that it would ‘freeze its rates’ after the Government announced that it would reverse potentially damaging changes to the ‘discount rate’ (see box) that would have increased personal injury payouts.

But one MDDUS member said they found out this week that their premiums have increased 12.5%, to more than £9,000.

The MDDUS responded that it ‘had been explicit’ that the price freeze meant no ‘additional rises…on top of those already in place’. It added that only two members so far had questioned their increases.

The MDDUS originally announced ‘a price freeze on the cost of indemnity for GPs until at least 2018’. The statement, released on 11 September, added: ‘We had warned our members that there may have to be further rises in the cost of indemnity during the next few months but I’m delighted to say that will not now be the case.’

But Dr Dan Hendry, a locum GP in London, told Pulse: ‘I received my MDDUS renewal today, and the cost has increased by just over £1,000 per year to £9,101.

‘I called the MDDUS who informed me that the price freeze only applies to the extra increase in cost that would have been expected due to the increase in personal injury discount rate, while the previous annual increase of a little over 10% (to cover increasing payouts) will continue to apply.

‘This does not amount to a price freeze in my view and I feel the MDDUS press release [which Pulse reported] was misleading.’

He added: ‘I’ve written to the MDDUS asking for an apology.’

But MDDUS director of development David Sturgeon said: ‘Our members were advised in their renewal letter that we may be forced to charge an additional fee on top of the one already implemented for 2016/2017 to cover the additional liabilities following the government’s initial decision to reduce the discount rate.

‘We vowed to keep members informed on any additional impact on membership fees.

‘In our press release, we were also explicit that the price freeze meant no more additional rises during the next year on top of those already in place. So far only two members have sought clarity on this point and we are confident that the vast majority of our members have clearly understood the good news about there being no more price rises during the year.’

How the ‘discount rate’ would have made general practice ‘untenable’

GP leaders had warned earlier this year that expected hikes in indemnity costs could make general practice ‘untenable’, following a change last February in the ‘discount rate’ that calculates the size of compensation claims.

This change meant victims may receive double the amount in compensation, resulting in huge increases in indemnity premiums.

Since February, there had been a stand off between the Department of Health and the medical defence organisations, with MDOs saying they will hold off increasing their fees while they wait for the Government to provide additional funding for GPs.

However, last month Lord Chancellor David Lidington announced the Government was putting forward changes to legislation that would stop this huge potential increase in payouts.