Indemnity providers in crunch talks with government over 'run-off' costs for GPs

Medical defence organisations are in talks with the government over an 'existing liabilities scheme' that could define whether thousands of GPs face additional bills for 'run-off cover' after state-backed indemnity takes effect next April.

Board room: talks ongoing (Photo:
Board room: talks ongoing (Photo:

Defence organisations have called repeatedly for more information on how the state-backed indemnity scheme will work, but with just seven months to go until its rollout GPs remain largely in the dark.

A May deadline for an update on the indemnity model was missed, and a statement issued in June confirmed little more than that the government remained committed to rolling out a state-backed deal.

GPonline has learned that talks are continuing on a pivotal issue around the extent to which the government will assume responsibility for historic claims - with the leading providers of GP indemnity split over the likely outcome.

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The leading defence organisation behind a cut-price scheme that has saved many GPs thousands of pounds in the current financial year believes the government should take on historic claims responsibility in a way that spares these GPs from having to pay for potentially expensive future 'run-off cover' - which would likely wipe out cost savings made this year.

But another provider warns that if the government agrees effectively to pay for this run-off cover, it could breach competition law and may not offer value for money for the taxpayer.

Thousands of GPs have now switched to the cheaper 'transitional' indemnity package offered by the MDU following the government's decision to roll out state-backed indemnity for GPs from April 2019.

The MDU offered the cheaper package by switching to a 'claims-made' indemnity model rather than the 'occurrence-based' system traditionally offered by defence organisations.

Claims-made cover

Claims-made indemnity policies offer cover against claims that occur during the period when the policy is active, and require further 'run-off' cover for claims that arise after the doctor has cancelled their policy, perhaps to retire or move to a different defence organisation. The traditional 'occurrence-based' schemes maintained by other leading indemnity providers this year cover GPs against all claims whenever they arise.

The MDU told GPonline: 'The medical defence organisations are currently in discussions with the DHSC about the forthcoming indemnity scheme, including the establishment of an existing liabilities scheme that we believe should see the state scheme taking responsibility for historic claims that pre-dated the scheme introduction.'

If the government takes full responsibility for all historic claims, this could mean GPs on the MDU's claims-made deal will not need run-off cover in future. However, a factsheet published by the government last year said: 'The government does not currently plan to include this run-off cover in a state-backed scheme. GPs with claims-paid or claims-made indemnity policies would therefore be required to purchase such cover separately themselves at the point they move to a state-backed scheme.'

MDDUS chief executive Chris Kenny said: 'MDDUS has been speaking to all levels of government to try to ensure that the form of state-backed indemnity chosen is best for GPs, best for patients and best for the taxpayer. We share the frustration of many in the profession with the paucity of detail provided about future plans and the refusal to consult properly on them if and when they do emerge.

Historic claims

'We are discussing the creation of an existing liabilities scheme (ELS) with the government. However we have yet to see any demonstrated need for any such scheme and consider that it is likely to raise very significant issues of legality and value for money for the NHS as a whole.

'We have therefore urged ministers to de-risk the creation of the future liabilities scheme by removing ELS from the agenda. Any ELS would have to be lawful in terms of state aid, public and competition law.  That would by no means be automatically guaranteed.

'Given that public expenditure on the NHS is limited, we have not seen a case for why such a scheme is better value for money and deserves priority over, say, GP remuneration to attract new entrants or primary care service development to secure new service models and direct patient benefit.'

Simon Kayll, chief executive at the Medical Protection Society said: ‘We anticipate that the historical GP liabilities of the MDOs will be transferred to the new government scheme and that the membership subscriptions we have already collected to meet historical GP liabilities will be also transferred. A similar approach was taken when state-backed indemnity was introduced for hospital doctors in the 1990s.

'The DHSC and the Welsh government have been clear that they do not plan to include run-off cover in a state-backed scheme. Both governments have stated that GPs who have claims-made or claims-paid protection would therefore need to personally apply for and purchase run-off cover in order to protect themselves against claims that arise in the future from adverse clinical incidents that occur prior to the introduction of the new government scheme.'

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