Medical professional liability insurance - what you need to know

To view the video of this Bootcamp session, click here.

INTRODUCTION

Medical liability insurance is a key tool for any successful career in medicine, but busy physicians often don’t take the time to understand why coverage is important and the options available to them.

LEARNING OBJECTIVES

• Understand why does you need medical professional liability insurance.
• Review different types of carriers, policies and coverages.
• Know the implications of “consent to settle.”
• Learn the differences between independent physicians and facility employees when it comes to the application process and ratings factors for your application.
• Understand the accepted standard of care and what happens when deviations are made (the filing of a lawsuit and why a trial happens).
• Recognize the importance of peer support.

MEET THE PANELISTS

Bruce Shulan
President and CEO
EmPRO Insurance Company

Professional liability insurance explained

The first thing physicians need to know about medical malpractice liability insurance is that the rules and carriers can vary dramatically from state to state, says Bruce Shulan, president and CEO of EmPRO Insurance Company.

The second thing to know is that physicians need malpractice insurance to practice and for a variety of other reasons including:

Hospital privileges.

Because it’s required by state law.

For professional and personal protection to cover claims arising out of the rendering or failing to render medical or surgical treatment, diagnosis, opinion or advice.

Shulan says it’s important to note the two types of insurance carriers: admitted and nonadmitted. Here’s the definition of each:

Admitted: These carriers are state regulated, approved and protected by the state’s guaranty fund. The insurance company must comply with all state regulations. If the company fails financially, the state will step in to make payments on claims as needed, subject to limits.

Nonadmitted: The insurance company does not necessarily have to comply with state regulations. If the insurance company becomes insolvent, there is no guarantee that claims will be paid. Also, there is often no rate or form stability.

The different coverage types also are important for physicians to understand, Shulan says. Those coverage types are:

Primary: policy that responds to the first dollar of loss.

Occurrence: covers claims that arise during the policy period, regardless of when the claims are made.

Excess: policy that provides limits above those of the primary policy.

Claims made: covers claims made against the insured during the policy period, often referred to as tail coverage.

Shulan says that insurance carriers rate physicians and determine the policy costs using a variety of factors. “The company will consider your specialty, the geographic area of practice (and) your claims history,” he says. “It really is experience centric. And as you go state to state, the rating scheme that’s available for admitted carriers is going to vary. And it can vary dramatically, and the pricing will vary dramatically.”

With the nuts and bolts of insurance policies out of the way, Shulan moved on to the crux of the matter: How is it determined that physicians practiced “bad medicine”?

And that comes down to “standard of care.”

“You probably learned this in medical school, but the standard of care here in New York, for example, is ... defined as the reasonable degree of learning and skill that is ordinarily possessed by physicians and surgeons in the locality where he or she practices,” Shulan says. “So standard of care is community based — it’s the community where you practice. And what the standard of care is talking about is: ‘Did you make a mistake? Did you deviate from the standard of care of the community?’”

And mistakes, Shulan says, can be boiled down into three simplistic types: “Bad medicine leads to a bad outcome, good medicine leads to a bad outcome and good medicine leads to a good outcome but just not a good-enough outcome,” Shulan explains.

When something goes wrong enough that a patient files a claim against a physician, the complaint must be publicly filed in court (subject to the statute of limitations) and the insurance company must be notified, Shulan says, adding that the insurer hires a defense counsel who becomes that physician’s attorney in the matter.

The goal of most malpractice lawsuits is to win money damages, but claimants also seek admission of wrongdoing and apologies from physicians, Shulan says. Most cases don’t end in “Perry Mason-like” trials, Shulan notes, but a malpractice case is still a fraught time for any physician caught in one, so it’s important to work closely with your insurance carrier and attorneys.

“Our civil justice system is imperfect,” he says. “There’s no doubt of that. But I’ll be honest with you, I know no better system.”

Solutions & takeaways

Do: Adequately and timely document patient charts.

Document contemporaneously
(this is key).

Establish and maintain an effective system to track patients.

Close the loop on all pending test results (including documenting patient contact and recommendations given in response to results and being clear about next steps and who is responsible for follow-up if co-treating with a specialist).

Establish and maintain a system for follow up care.
Schedule future appointments, and follow-up on missed appointments.

Do: Pay particular attention to “difficult patients.”

Take time to document a patient’s noncompliance.

Don’t: Change patient charts after the fact and back date.