High Cost Claims Scheme - Frequently Asked Questions

This page answers questions on the HCCS from the viewpoint of doctors.

Page last updated: 02 June 2009

What is the High Cost Claims Scheme?

Under this scheme, the Australian Government will reimburse medical indemnity insurers, for each claim, 50% of the insurance payout over $300,000 up to the limit of the practitioner's cover, for claims notified on or after 1 January 2004.
Your claim will only be covered by this scheme if you are insured.
The High Cost Claims Scheme minimises the impact that large claims may have on the ability of medical indemnity insurers to continue to provide affordable indemnity cover for doctors.
This will provide more certainty to the providers of medical indemnity cover and will give doctors greater confidence in their insurance arrangements.

How will the high cost claims scheme reduce doctors' premiums?

This scheme helps to produce downward pressure on premiums, particularly for doctors in high-risk areas by:
  • lowering the amount MIIs have to pay out;and
  • reducing the amount of reinsurance MIIs need to buy to fund large claims.

Why is there only a 50% payment for the excess of high cost claims?

The subsidy has been restricted to 50% (of the insured amount) to ensure that medical indemnity insurers bear some of the risk of high payouts for medical negligence.
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Are claims against me be covered by the High Cost Claims Scheme if it is more than the level of insurance?

Your claim will only be covered by the High Cost Claims Scheme up to the limit of your medical indemnity insurance coverage. The Scheme will not cover your claim for any amounts due over that limit.
However, the Australian Government's Exceptional Claims Scheme can help doctors where claims exceed their contract limits. If the claim is over the specified threshold limit (currently $20 million) then the Australian Government will cover 100% of costs over the contract's limit. This means doctors will not be personally liable for very large claims (see: Exceptional Claims Scheme).

Why does the extension to the High Cost Claims Scheme only cover claims notified on or after 1 January 2004?

MDOs and MIIs would not benefit from a retrospectively extended High Cost Claims Scheme threshold due to their reinsurance contract arrangements.

How long will the High Cost Claims Scheme continue?

The Australian Government will continue to review the need for direct financial support and large claims arrangements as state and territory law reforms and the other elements of this package impact on the availability and cost of medical indemnity insurance. The need for this measure will also be affected by stabilisation of global reinsurance markets.
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.
The Department of Health and Ageing 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.

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