What GPs need to know about state-backed indemnity

The state-backed indemnity schemes for GPs in England and Wales began on 1 April. GPonline explains how the schemes work, what they cover and when GPs will need to contact them.

(Photo: Sturti/Getty Images)
(Photo: Sturti/Getty Images)

What is state-backed indemnity?

From 1 April 2019, GPs, including locums, and practice staff in England are now covered by a state-backed indemnity scheme, which is called the Clinical Negligence Scheme for General Practice (CNSGP). GPs and staff in Wales are covered by the Scheme for General Medical Practice Indemnity (GMPI), which also began on 1 April.

In Scotland, indemnity costs are traditionally lower and therefore there is no state indemnity scheme. GPs will still rely on being members of medical defence organisations (MDOs) for all indemnity cover. This also remains the case in Northern Ireland.

How will the scheme work?

The new Clinical Negligence Scheme for General Practice in England is run by NHS Resolution, while the Welsh GMPI scheme is run by NHS Shared Services Partnership – Legal and Risk Services. Both organisations are currently responsible for clinical negligence indemnity for secondary care.

In England, all NHS GPs and those working in general practice or out-of-hours are automatically covered by the scheme, including locum and salaried GPs, prison GPs, nurses and other health professionals. There are no formal registration requirements for staff to be covered.

GPs will also be covered for any public health work they do under arrangements with local authorities, NHS England, a CCG or an NHS trust, including sexual health services, health visiting, NHS Health Checks and dealing with public health emergencies.

The Welsh scheme is similar, but with one key difference. Last month the Welsh government announced it was introducing a new 'all Wales locum register' in an attempt to help the government better understand the locum workforce. In order for locums in Wales to be covered by the GMPI scheme they will have to sign up to the register.

What does the scheme cover?

The schemes in England and Wales cover claims for compensation arising from the care, diagnosis and treatment of a patient in the NHS relating to incidents which happen on or after 1 April 2019. The government in England intends to establish an existing liabilities scheme to cover historic claims but it is for the MDOs to decide whether they take part in this (see below).

Claims for incidents before 1 April will, at present, be covered by GPs' previous indemnity provider. If there is a series of events that straddle both periods, the new scheme will only cover the element relating to post 1 April.

Like the cover GPs and practices have been purchasing from medical defence organisations all benefits under the schemes are discretionary. There is no limit of indemnity under the CNSGP and no excess.

However NHS Resolution will have discretion over which cases it will pay out for and which it will defend. It will not pay out for a claim if the GP wants to settle but the scheme recommends defending. In addition, if a GP wants to defend but the scheme recommends the claim is settled, it will only pay out the amount it initially recommended as settlement if the GP pursues their defence.

The Welsh scheme has said that cover will only be refused in rare situations. These might include a significant history of a practice failing to learn lessons from previous incidents, complaints or claims, if a GP has been involved in a significant costly previous claim and an unacceptably long period of delay in notifying Legal and Risk Services about the claim that could affect its ability to manage the claim effectively.

What won’t be covered by the scheme?

GPs will need to have additional indemnity for any non-NHS work they undertake, which would include work in the practice such as signing letters, writing reports or any task for which the practice receives a separate private fee. 

The state schemes only cover clinical negligence claims, so GPs will also need to retain membership of an MDO to ensure they have legal representation and support in case of any GMC fitness-to-practise hearings, performers’ list investigations and criminal investigations.

Likewise many GPs and practice managers make use of their MDO's helpline to obtain advice on specific medicolegal issues or for help resolving patient complaints - this is not part of the state schemes so GPs would still need membership of an MDO for this service.

GP partners will also need to consider the indemnity arrangements for their staff. For example, the practice may currently pay for indemnity for nurse practitioners or practice nurses. The state schemes will also only cover nurses for clinical negligence claims relating to NHS work and they will also need extra indemnity for any private work, for example travel vaccinations for which the practice charges a fee, and representation at NMC fitness-to-practise hearings and any other investigations.

Do the schemes cover historic liabilities?

An existing liabilities scheme that will cover cases that were ongoing when the scheme started, and those that come to light later but relate to incidents that happened before the scheme started, is due to be established shortly in England. Discussions with the Welsh government about existing liabilities are still ongoing.

Under the arrangements in England the government has agreed terms with the MPS to take on its historic claims, but it is still in discussions with the other two MDOs.

The MPS has said it is working 'hard to finalise the details of the new arrangements' and to ensure a smooth transition it will continue to manage existing claims for the next two years. MPS chief executive Simon Kayll said the move was a ‘really positive outcome as all these claims – however much they settle for or however long in to the future they settle - will now be the responsibility of government’.

The MDDUS said it was still in discussions about whether to join the existing liability scheme. MDDUS CEO Chris Kenny said: ‘We cannot speculate about the outcome at the moment, but we will not see our current and potential members sold short financially or personally.’ He added that regardless of the outcome MDDUS members would have lifetime acces to unlimited indemnity for events prior to 1 April.

However, the MDU said that the government had 'failed in its promise to put in place a realistic solution' for existing liabilities.

Following the government’s announcement of the state-backed scheme in 2017, the MDU launched a ‘transitional benefits’ package that cut GP indemnity costs. This involved GPs switching to a ‘claims-made’ indemnity model rather than the 'occurrence-based' system traditionally offered by defence organisations, meaning GPs are covered only during the period the policy is active.

Until the MDU can agree terms with the government about covering its historic liabilities, any MDU members on the transitional benefits scheme will have to pay for extra 'run-off' cover if they leave the organisation. The MDU has previously said this will only apply for a maximum of seven years, and cost no more in total than standard indemnity cover would have cost for the period the GP was on transitional benefits. GPs who remain members of the MDU until the normal retirement age of their NHS pension scheme will not need to purchase run-off cover.

Reporting a claim

As is the case now, GPs in England are encouraged to contact NHS Resolution or their indemnity provider as soon as possible after receiving a letter of notification or letter of claim.

In England, GPs and practices are also advised to contact NHS Resolution in the following situations:

  • If they have been involved in a notifiable patient safety incident which has or may have resulted in severe harm irrespective of whether a claim has been made.
  • If they receive a request for disclosure of patient records or some other indication that a claim is being considered.
  • If they receive any communication from the health ombudsman (in this case GPs should also contact their MDO)
  • Any response to a complaint they are making which amounts to an admission of breach of duty. However NHS Resolution said this should not stand in the way of the need to be open and transparent with the patient at the time.
  • If they intend to offer compensation or redress.
  • If there is any adverse issue that has the potential to involve a group action by a number of patients.
  • Once a claim has been reported NHS Resolution will contact GPs by email or telephone within 72 hours to confirm if it is covered by the scheme and allocated a dedicated claims manager.

In Wales, GPs should contact Legal and Risk Services in the event of an actual or possible claim, or when a patient has been harmed and before issuing any complaint response letter which could 'reasonably be interpreted as making an admission of liability'.

If a claim arises it will be entered into a triage system with a claims handler and GPs will be informed as to whether or not they are covered by the scheme, or if it is a matter that should be taken up with their MDO. There is a useful document that sets out a number of scenarios and how quickly GPs should contact the GMPI scheme here.

How much will GPs save?

Under the 2019/20 GP contract the scheme in England has been funded by a one-off permanent adjustment to the global sum. However, as a result of other investment under the contract, core funding will rise by 1.4% in 2019/20, even when taking account of the indemnity adjustment.

GPs could see their individual costs for indemnity cover fall by 80-90% early indications suggest.

The MDDUS has said that fees will range from £472 to £900 a year and will reflect individual circumstances.

Find more information about the scheme in England here and in Wales here

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