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MDOs warn of ‘substantially’ increased costs from reforms to indemnity schemes



Government plans to overhaul clinical negligence cover for claims that fall outside of the new NHS indemnity scheme will increase costs ‘substantially’ for GPs, medical defence organisations have warned.

The UK Government is consulting on proposals to bring in regulations governing medical indemnity for work that is not included in state-backed schemes, such as private work.

It wants to see new rules brought in that mean MDOs are contractually obligated to take on cases – instead of the current situation where they can refuse to do so under certain circumstances.

The Government believes the new rules would remove the risk of healthcare professionals being held personally liable for claims made against them – and of patients potentially receiving no compensation if the professional is unable to pay.

In its ongoing consultation on the proposals it says there are only a ‘limited number of cases’ where this has happened in the past – but it warns the rising cost of clinical negligence claims may lead to MDOs increasingly choosing not to take on cases.

If the rules were brought in, MDOs would have to offer insurance to members instead of the ‘discretionary’ cover they currently provide.

But the Medical Defence Union (MDU) said the change would ‘increase the costs substantially and is bound to have an impact on [GPs’] ability and/or willingness to undertake such work, to the detriment of everyone’.

In addition the Medical Protection Society (MPS) warned doctors would be subject to an insurance premium tax if the changes were to go ahead.

In England and Wales – where claims relating to NHS work will be paid for by the Government under a new scheme being introduced in April – these latest proposals will affect GPs who carry out private work.

Any move to insurance-based schemes would have the biggest impact on GPs in Scotland and Northern Ireland where there are no plans, as yet, for state-backed indemnity schemes.

The MDU told Pulse indemnity fees would rise if the Government went ahead with its plans due to a number of different costs associated with insurance companies.

A spokesperson for the MDU said: ‘Insurers need to make a profit for their shareholders, policies are subject to insurance premium tax and there are often brokers’ fees to meet. These costs are likely to be passed on to doctors, leading to higher indemnity costs for them.

‘Discretionary indemnity has successfully provided appropriate indemnity for medical practitioners for over a century, and it continues to do so. This represents value for money for GPs and helps to ensure that claims are responded to professionally and without delay.’

In its response to the consultation, the MDU said: ‘There is no need to introduce mandatory insurance. It will not provide any greater degree of certainty that compensation will be available for patients many years after an incident resulting in negligent harm, but it will increase the cost substantially for practitioners. It has the potential to damage what is already an efficient market.’

The MPS also warned of rising costs, while highlighting that some insurance providers might restrict their cover.

MPS chief executive Simon Kayll said: ‘We are particularly concerned that the proposals would mean doctors have to pay additional costs – including the cost of insurance premium tax – at a time when the rising cost of clinical negligence is becoming increasingly unaffordable.

‘We are also concerned that some insurance products offered may include limits and exclusions which do not adequately protect doctors against a claim; discretionary indemnity does not have such limits or exclusions.’

He added: ‘The Government admits in their consultation document that they are only aware of a limited number of cases where current arrangements have caused problems for patients or healthcare professionals.’

The Department of Health and Social Care announced the state-backed scheme in October 2017 after acknowledging the cost of medical negligence cover was affecting GPs’ ability to work. Then health secretary Jeremy Hunt said at the time that it will be ‘more affordable and reliable’.

It followed pressure from the profession and Pulse who argued that indemnity costs were ‘killing’ general practice.

The Government’s consultation on the changes to indemnity regulations closes 28 February.