State-backed indemnity will slash GP costs by 'substantially' more than 50%

Indemnity costs for most GPs are set to fall by 'substantially' more than half from 1 April when state-backed cover takes effect, GPonline can confirm.

GP costs set to fall (Photo: iStock.com/JohnDWilliams)
GP costs set to fall (Photo: iStock.com/JohnDWilliams)

Some GPs will also receive indemnity refunds in April because medical defence organisations say revised rates will apply immediately from the start of the coming financial year, even if GPs are part-way through an existing annual indemnity policy.

Defence organisations have told GPonline that members will find out 'imminently' or 'in the coming days' what their indemnity costs will be for the year ahead, with just weeks to go until state-backed GP indemnity takes effect.

All three main providers of GP indemnity - the MDU, MPS and MDDUS - have confirmed that their rates will drop significantly as the state-backed indemnity scheme takes the burden of paying for clinical negligence cover for NHS work off the profession.

Indemnity cover

However, estimates of the precise cost of ongoing cover GPs will require have varied, and experts have hinted privately that GPs expecting their indemnity bill to be all but erased may be in for a shock.

But the MDU has confirmed to GPonline that the cost of cover that GPs will need from 1 April 'will be substantially lower than our transitional benefits subscriptions’. The MDU's transitional scheme halved indemnity fees for members who renewed their cover from 1 November 2017 onwards.

The BMA estimated last year that average annual indemnity fees had risen to around £8,000 per GP, with fees likely to have risen since then, but offset to some extent by millions of pounds delivered through GP contract agreements in recent years to mitigate rising costs.

The state-backed scheme will cover ‘clinical negligence liabilities of general practitioners and others working in general practice in respect of activities carried out for the purposes of the national health service in England’ from 1 April - but GPs will need to maintain cover for non-NHS work, GMC representation and other matters.

Reduced costs

If fees from 1 April are ‘substantially lower’ than the MDU 50% transitional rate, this would suggest that an average GP could see costs drop by in excess of £5,000 - with all defence organisations likely to set rates at a similar level when the state-backed scheme kicks in. Practices will see further reductions from lower indemnity costs for salaried GPs and other staff.

A caveat for GPs hoping for a windfall as state-backed indemnity takes effect comes in the form of a 'balancing clause' inserted in the five-year contract unveiled earlier this year. GPonline revealed earlier this year that the clause allowed core GP funding to be cut back in future years if partners' profits are 'unexpectedly large' in 2019/20.

An MDU spokesperson told GPonline: 'Our new subscription rates will reflect the introduction of the state-backed scheme for future liabilities after 1 April and will be substantially lower than our transitional benefits subscriptions.

'Where a member paying for transitional benefits has a significant part of their current membership year still to run at the point the new government scheme is introduced they can expect to benefit from the lower subscriptions.' 

MPS chief executive Simon Kayll said: 'We will be confirming the price of membership to members very soon. Most Medical Protection members working in general practice can expect to pay significantly less for their membership when the indemnity component is removed or reduced regardless of the annual renewal date. All members who are due a refund should receive this in April 2019.'

MDDUS chief executive Chris Kenny said: 'Most members will find that the cost of our new product is significantly less than their current subscription package. We will let our members know the details in the coming days and explain how we are making refunds or adjusting direct debit payments.'

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