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MDU admits ‘dwindling funds’ to cover GPs’ future claims

The Medical Defence Union has admitted that it has been ‘dwindling funds’ to pay for claims from GPs for historic claims after a failure of discussions with the Government. 

The MDU reported that the Department of Health and Social Care (DHSC) has failed to engage in ‘any meaningful discussions’ over indemnity cover for its members since the introduction of the new NHS indemnity scheme.

The organisation warned that failure to agree to a scheme that indemnifies its members for their historic claims could see an ‘increased demand against dwindling funds contributed by these GPs’.

GP leaders said this could be ‘enormously concerning’ for the approximately 47% of GPs who are MDU members.

The new state-backed scheme came into effect on 1 April to cover all future clinical negligence claims occurring on or after 1 April for NHS work, in light of claims costs inflation making indemnity increasingly unaffordable for GP.

The MDU previously reduced its fees for its members because it believed the Government scheme would pick up historic cases – but GPs were later warned this may not be the case and could leave them liable for costs.

Writing to Dr Sarah Wollaston, MDU head of governmental and external relations Mary-Lou Nesbitt expressed concerns over the lack of engagement from the DHSC, despite repeatedly trying to reach a solution around clinical negligence liabilities for claims arising before 1 April.

She wrote: ‘While the state scheme indemnifies GPs’ clinical negligence claims arising from incidents after that date, we could not agree arrangements with the DHSC that would be acceptable for our GP members’ clinical negligence liabilities for claims arising from incidents before 1 April 2019.

‘This means the NHS will take responsibility for future claims made against all GPs arising from incidents after 1 April, but the MDU’s GP members remain responsible for their historic claims, that is ongoing claims and claims that have yet to be made as a result of incidents that happened before 1 April. (Experience shows these claims can be made up to 10, 20, 30 or more years after the original incident).’

GPs with the MDU receive assistance and indemnity on an occurrence basis, which means they are covered for any arising claims that happen during their membership year. 

However, since the scheme covers GPs for incidents occurring after 1 April – including those with the Medical Protection Society (MPS) and the Medical and Dental Defence Union of Scotland (MDDUS) – MDU’s members remain responsible for their historic claims. 

Ms Nesbitt said: ‘The outcome of the DHSC’s failure to agree a scheme to indemnify the MDU’s GP members for their historic claims is the prospect of increased demand against dwindling funds contributed by these GPs.

‘We tried repeatedly to find a solution with the DHSC before 1 April to extend NHS indemnity to our GP members’ historic claims. Regrettably, as no agreement was reached and our GP members are left in the difficult position I have explained, we had to resort to judicial review which remains pending.

‘The fact of ongoing litigation should not prevent the parties from trying to reach an agreement to resolve the problem, but despite our attempts to open a constructive dialogue, DHSC has not engaged in any meaningful discussions with us since 1 April and we are unable to move this along. Four months have passed and the problem is becoming increasingly acute.’

GP Survival chair Dr Nicholas Grundy said the move left the union in a difficult position and affected GP members. 

He said: ‘The MDU took a commercial risk to try to win business, and now want the state to pay for the financial outcomes of that decision.

‘This is enormously concerning for affected GPs. The MDU admit that their decision has left them without enough money in the coffers to cover future claims, and they have refused to agree terms with the Government for them to take on these risks. That, therefore, risks the MDU being unable to fund claims in future because of their decision to cut costs to members without an agreement to cover the shortfall.

‘Unless the MDU can find a solution to this which doesn’t involve someone else paying for their mistake, doctors need to think extremely carefully about signing up with an organisation, which has publicly admitted there’s a hole in its future funding to cover claims.’

In response, health secretary Matt Hancock said negotiations with the MDU are ongoing and ‘yet to bear fruit’.

He said: ‘On 1 April 2019 the Government announced it had agreed commercial terms with the MPS covering historical NHS clinical negligence claims of MPS’ general practice members for incidents that occurred before 1 April 2019. We indicated that discussions were ongoing with other MDOs. This was to include separate discussions with the MDU and the MDDUS representing a significant proportion of the remaining GP indemnity market.

‘Accordingly, the Government continued to negotiate with both MDDUS and MDU. Negotiations with the MDDUS successfully concluded on 20 September 2019 and commercial terms have now been agreed to address historical liabilities of their members, However, negotiations with MDU are yet to bear fruit.’

The MDU has asked for the following clarification: 

‘Our letter to Sarah Wollaston was aimed at pointing out the need for DHSC to find a solution on historic claims which is fair and acceptable for our members.

‘Transitional benefits have nothing to do with the problem of historic claims. Our transitional benefits membership was put into place for a short amount of time because GPs couldn’t afford to pay for the true cost of claims following the Lord Chancellor’s decision to drastically reduce the discount rate. It is inaccurate for the GP commentator to link the two issues.

‘GPs no longer pay subscriptions for indemnity for NHS work to their medical defence organisations and the fact that subscriptions have dwindled is as expected. It is not news.

‘The MDU is the biggest indemnifier of English GPs and our members have claims going back 30 years or more. These historic liabilities have been inflated retrospectively by successive governments and this Government should be addressing them through a sensible Existing Liabilities Scheme.

‘MDU members are in very good hands but it would be better for them to have the certainty of a fair agreement with the Department of Health and Social Care in respect of their historic liabilities. Until a scheme is introduced, the Government will have failed in its promise to put in place a system that is both more stable and more affordable for all GPs. The MDU will continue to work towards a fair outcome for our GP members.’