The Ministry of Justice stated today that it will not tolerate the creation of ‘shell’ companies designed to undermine its scheme to support independent diagnoses of whiplash injuries.
It has published new rules and qualifying criteria for companies wishing to join the panel of medical experts instructed to diagnose soft-tissue injuries.
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The MedCo system has been plagued by companies creating dozens of ‘shell’ entities designed to appear in as many options as possible when lawyers carry out a random search for experts.
The MoJ today stressed that medical reporting organisations set up purely as a ‘shell’ to gather instructions and forward them on to a ‘parent’ are not allowed.
‘It is acknowledged that some MROs may fall under a common third-party ownership model but MROs must be fully functioning entities in their own right and must have a principal function of providing medical reporting services,’ said the department.
Under the new rules, all aspiring MROs must provide documented assurances they are independent, properly staffed and resourced, and ‘directly and solely’ responsible for all work associated with receiving instructions.
Each MRO must establish and maintain the direct management and control of a panel of MedCo-accredited experts, and they must employ staff in-house with responsibility for managing instructions.
All MROs must also put forward a ‘financial instrument’ of £20,000 to show they have sufficient funds available to remunerate medical experts commissioned to write reports.
They will also be expected to have a minimum of £1m for professional indemnity insurance and £3m for public liability insurance.
The criteria apply to all new applicants from today, and to existing companies from 8 November.
As part of the changes, which follow a consultation completed last year and subsequent survey of MedCo users, the revised offer on a search of MedCo will come up with two tier-one MROs and 10 from tier two.
This is an increase from the seven options that currently appear.
The MoJ said top-tier organisations must have the capacity to process at least 40,000 independent medico-legal expert reports each year. If they are new they must show an appropriate business strategy and operational functions to manage such a workload.
They must have contractual agreements with at least 250 individual active MedCo-accredited experts.
These experts must be located in 80% of the postcodes of England and Wales, and in 80% of cases the injured victim must be less than 15 miles from the expert. Top-tier firms, which have three months to comply, must have a financial instrument of £100,000.
Failure to meet the qualifying criteria at any level may lead to further action being taken against that MRO, including suspension and/or removal from the system.
MoJ unveils plan to rid MedCo scheme of shell companies
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