Before taking action based on the information provided on this page, you need to consider your own situation and the relevant laws. You should seek advice that takes account of your particular set of circumstances. Check with your medical indemnity insurer if they have additional requirements which may not be covered here.

The Department of Health makes reasonable efforts to ensure that the information provided on this page is accurate. However, before relying on any information on this page, you should always check that the information is accurate, current and complete. The Department does not guarantee the accuracy, currency or completeness of the information on this page. The Department accepts no legal liability for the information on this page.

Exceptional Claims Scheme

What is the ECS?
How will the ECS be funded? Will practitioners have to fund the Scheme?
What claims will the ECS cover?
What cover does a practitioner need to have to be covered by the ECS?
What are the eligibility criteria for the ECS?
How will deductibles and excesses be treated under the ECS?
Who can apply for the ECS?
What will the ECS payments cover?
How will an ECS indemnity payment be made?
What if a payment is made by the Department of Human Services and the applicant fails to pass it on?
How is the ECS different from the High Costs Claims Scheme (HCCS)?
How will any changes to the threshold affect the contract limits offered by insurers?
How will the ECS affect an insurer's financial and prudential obligations?
Allied Health Exceptional Claims Scheme (AHECS)

What is the ECS?

Under the Exceptional Claims Scheme, privately practising health practitioners are protected against personal liability for eligible claims that exceed the level of their insurance cover. The Government will pay 100 per cent of the cost of eligible claims that are above the limit of a practitioner’s medical indemnity contracts of insurance and that meet the relevant threshold of $20 million.

These claims can be  a single very large claim or an aggregate of claims that together exceed  the $20 million threshold limit.

From 1 July 2020, the ECS will be limited to medical practitioners (ECS) and a separate scheme will be available for allied health professionals.

How will this Scheme be funded? Will practitioners have to fund the Scheme?

The ECS is fully funded by the Government. Practitioners are not required to make a contribution.

What claims will the ECS cover?

The ECS will cover incidents that were notified after 1 January 2003 or which occur during the life of the Scheme that are covered by a contract of insurance even if these are not notified until after any winding up of the Scheme.

What cover does a practitioner need to have to be covered by the ECS?

The practitioner must have medical indemnity insurance cover to at least the nominated threshold.

The Government through legislation sets the threshold. The threshold for the ECS is currently $20 million, either as a single claim or as an aggregate of claims that together exceed the threshold. However, if the practitioner has a contract of insurance, which has a limit higher than the threshold, the Scheme will apply above the contract limit.

The practitioner must be named or referred to in the insurance contract.

What are the eligibility criteria for the ECS?

The incident that gives rise to the claim must be:

• notified or have occurred during the operation of the Scheme. The Scheme will respond even if the claim is not made until many years after the Scheme ends;
• notified under a contract of insurance provided by a medical indemnity insurer with a contract limit to at least the level of the threshold;
• the claim which relates to the incident must exceed the insurance contract limit (or be one of many claims that together exceed the contract limit);
• within the scope of the contract, that is: if not for the cover limit the contract of insurance would have covered it;
• occur in Australia or its territories or under certain circumstances (such as aid work) provided overseas; and
• occur in part or whole in the treatment of a private patient (public patient treatment is the responsibility of States and Territories).

How will deductibles and excesses be treated under the ECS?

Any deductible or excess in the contract will be treated as a deductible or excess. In entering into the contract, the practitioner agrees to make these payments.

So, if a practitioner has agreed to pay the first $10,000 of each claim, and there is claim that exceeds the contract limit, the Scheme will only pay once the practitioner meets the first $10,000 of the claim.

Who can apply for the ECS?

A medical practitioner or allied health professional, or someone acting on his or her behalf, which may be the practitioner's insurer or someone acting on his/her behalf, can apply to Services Australia (previously the Department of Human Services) for payment.

What will the ECS payments cover?

ECS payments can include:

• damages amounts to patients;
• legal costs;
• administrative costs associated with managing the claim; and
• costs incurred by your medical indemnity insurer in managing an incident that they are notified of which may or may not go on to become a claim.

As large claims may take many years to finalise, applicants can apply for a Qualifying Certificate and receive payments progressively as costs are incurred, where it can be established that the claim will exceed the threshold, prior to the claim being finalised.

Payment will include an administration fee paid to the insurer.

How will an ECS indemnity payment be made?

The ECS indemnity payment is made to the person who applies. This might be different to the person who applied for the qualifying certificate.

The person must forward the payment on to discharge the practitioner's liability. This would usually take the form of paying the plaintiff's solicitor.

Any overpayments would be recovered from the person who applied.

What if a payment is made by Medicare Australia and the applicant fails to pass it on?

Services Australia will seek to recover the amount paid from the applicant.

How is the ECS different from the High Costs Claims Scheme?

The ECS covers claims above the insurance contract limit andallows for payments directly to practitioners, whereas the HCCS assists medical indemnity insurers with the cost of claims they manage. These differences are reflected in:

• the ECS application and payment processes directly affect practitioners; and
• that there are requirements for defence of the claim to be conducted prudently and for a legal practitioner to assess the reasonableness of a settlement amount.

How will any changes to the threshold affect the contract limits offered by insurers?

There will be time for insurers to reflect any changes to the threshold in their insurance contract:

• an increase in the threshold would be set by rules and can only take effect three months before the start of a policy year. A decrease in the threshold would not take effect until at least three months after the rules were registered on the Federal Register of Legislative Instruments, would have an immediate effect;
• an amendment to the rules to change the threshold will only apply to contracts entered into after the making of the rules.

How will the ECS affect an insurer's financial and prudential obligations?

Medical indemnity insurers may contact the Australian Prudential Regulation Authority to find out about financial and prudential requirements.

Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001

Allied Health Exceptional Claims Scheme (AHECS)

Under this new scheme, privately practising allied health professionals including midwives indemnified under their employer’s professional indemnity insurance policy registered by AHPRA are protected against personal liability for eligible claims that exceed the level of their insurance cover.

The Government will pay 100% of the cost of eligible claims that are above the limit of an allied health professional’s medical indemnity contracts of insurance and equal or exceed the relevant threshold of $20 million. This scheme commences on 1 July 2020.

The AHECS is largely consistent with the circumstances described in the ECS. The difference is that the incident, or series of incidents, must have occurred on or after 1 July 2020. However, if the incident occurred before 1 July 2020, allied health practitioners will continue be eligible under the ECS.

Health practitioners are not required to make a contribution towards the ECS. It is fully funded by the Government.