Applying for the PSS
To take part in the PSS, doctors need to:
- apply to an insurer that offers the PSS
- estimate their gross private medical income for the premium period.
To work out if the doctor is eligible and the subsidy amount, the insurer will also need to know:
- any costs payable to other insurers for run-off cover or retroactive cover
- the doctor’s speciality
- the doctor’s provider number and practice address.
To find out more, doctors can contact their insurer or visit their website. The insurer can pay the subsidy in advance as a reduced premium or after the premium period as a refund.
Insurers must invite doctors to take part in the PSS before entering a contract of insurance.
Obligations of doctors
After the end of each premium period, doctors must inform their insurer about their actual:
This allows the insurer to ensure the doctor is still eligible and adjust the subsidy amount if needed.
Insurers will only ask for the information they need to work out the subsidy amount. If a doctor chooses not to provide this information, they will not be eligible for any subsidy for that premium period.
By providing this information, the doctor is consenting to:
- take part in the PSS
- share the information with the Australian Government for PSS administration and audits.
Provide accurate and up-to-date information
Doctors must:
- be as accurate as possible
- let their insurer know of changes to their circumstances at any time, such as changes to their:
- income estimate during the premium period
- specialty.
The insurer will adjust the subsidy amount as needed and re-invoice the doctor.
Repayments
Insurers may recover from doctors any subsidy amounts that are based on inaccurate information.
Premium period
For most insurers, the premium period is the 12 months from 1 July to 30 June.
Gross indemnity costs
Gross indemnity costs are the costs the medical indemnity insurer charges, excluding GST and stamp duty. They include:
- premiums
- membership fees
- any costs for retroactive or run-off cover that other insurers charge the doctor.
Gross private medical income
Gross private medical income means the total of all a doctor’s billings for a premium period before deducting any expenses or taxes. It must:
- include billings from all areas of their practice that their indemnity insurance covers
- not include billings for any public services that their public sector employer covers.
The billings can be in their name or for work for which they are personally liable.
Gross private medical income includes:
- Medicare benefits
- payments by individuals
- payments by the Department of Veterans' Affairs
- worker compensation schemes
- payments from third party and vehicle insurers.
It must also include any income the doctor receives as part of their private practice (such as incentive payments and professional fees).
This approach to gross private medical income applies to full-time and part-time work.
If a doctor has private and public sector employer indemnity cover
To work out their gross private medical income, the doctor needs to know what their private practice insurance and their public sector employer’s insurance covers.
If they are not sure, they can:
- check their contracts of insurance
- ask their employer or their insurer.
Gross private medical income does not include billings for services that are covered by the employer’s indemnity insurance. This is because doctors do not pay for the cost of that cover – their public service employer does.
Why the PSS uses billings and not the doctor’s salary
The PSS subsidy is based on billings for medical services, not income retained by the doctor.
This is because:
- premiums are risk-rated, and a doctor’s risk is based on the medical services they provide
- doctors are liable for the medical services they provide when a claim is made against them.
Subsidy amount
Subsidy amount if costs exceed private income
The subsidy amount is 60% of the difference between the doctor’s gross indemnity costs and the PSS threshold.
The PSS threshold is 7.5% of the doctor’s gross private medical income.
For example, a doctor’s:
- gross income is $100,000
- gross indemnity costs is $8,500.
This would give us the following numbers:
- PSS threshold: $7,500 (7.5% of $100,000)
- Difference between the costs and the PSS threshold: $1,000 ($8,500 minus $7,500)
- Subsidy amount: $600 (60% of $1,000)
Subsidy amount for procedural GPs in rural areas
The subsidy amount is 75% of the difference between the premiums for:
- procedural GPs in rural areas
- non-procedural GPs in similar circumstances (similar location, income, and insurer).
For example, the cost of premiums for:
- a procedural GP in a rural area is $10,000
- non-procedural GPs in similar circumstances is $9,000.
This would give us the following numbers:
- Difference between the cost of premiums: $1,000 ($10,000 minus $9,000)
- Subsidy amount: $750 (75% of $1,000)
Subsidy amount for public sector work only
This is for doctors who only work in the public sector but have run-off or retroactive cover for previous private practice (special case 2).
The subsidy amount is 60% of the doctor’s gross indemnity costs.
For example, a doctor’s gross indemnity costs is $10,000. The subsidy amount will be $6,000 (60% of $10,000).
How subsidies are paid
The insurer can pay the subsidy in advance or as a refund after the end of the premium period. The doctor can choose which they prefer.
Paid in advance
If the insurer pays the subsidy in advance:
- the insurer estimates the subsidy based on the doctor’s estimated income and costs
- the insurer gives the estimated subsidy to doctors as a reduced premium
- after the end of the premium period:
- the insurer works out the actual subsidy based on the doctor’s actual income and costs
- the doctor either pays extra or receives a refund.
Paid as a refund
If the insurer pays the subsidy as a refund:
- the doctor pays the premium in full
- after the end of the premium period, the insurer:
- works out the subsidy based on the doctor’s actual income and costs
- pays the subsidy to the doctor.
Insurers that offer the PSS
Six medical indemnity insurers currently offer the PSS:
How PSS is funded
The Australian Government fully funds the PSS.