Six Important Liability Insurance Questions for Medical Practices

I’ve been at the Medical Group Management Association’s (MGMA) annual conference in San Antonio this week. One thing that stood out this year: physicians and practice managers attending have a lot of questions. There is a lot of uncertainty about everything from the future of primary care to how to operate a financially viable medical practice in the rapidly changing world of healthcare today.

With so much on their plates and so many things beyond their control, it occurred to me that many administrators and physicians are missing something in an important area they can control - the cost and value of their specialized physician group insurance coverage. While the details may require expert time and attention, there are a few simple things you can do to make sure you have the right insurance, at the right price, against an ever-changing healthcare market backdrop.

Think about your current practice

Think about how much your practice has likely changed over the past few years. Have you taken the steps necessary to ensure your insurance coverage is keeping up with those changes?

• Have you added new non-physician staff, thus taking on more direct care?

• Have you added nutrition or dietary supplements or services?

• Are you providing cosmetic procedures or products?

• Have you added programs to improve patient satisfaction?

These are steps many physician practices are taking today - all of them may significantly change the risk factors facing an organization, leaving you exposed and vulnerable if not addressed.

While some changes may lead to increases in risk, others could actually lower costs by helping to ensure better overall quality and outcomes.

Ask yourself these questions

There are several simple questions that any practice can ask to determine whether they have the appropriate coverages and carriers. These include:

1. Does my long-term disability (LTD) coverage provide the protection I need? There are two parts to this question. First, does the coverage provide the protection you need? That is, if you are a surgeon and become disabled at age 45, would the coverage be sufficient to provide financial support over your lifetime? Second, who is providing your LTD coverage? Is it a reputable, stable company that will be strong and financially secure when needed, or did you go for the lowest cost provider?

2. Is my malpractice premium covered by my LTD? Most physicians don’t even consider this possibility, but they should. If your malpractice premiums are not covered under your LTD policy, it could end up costing you in the event of a disabling illness or injury, and subsequent claims. Ask your broker or carrier for more information.

3. Is my sub-specialty covered or just my general specialty? Many highly-skilled physicians today perform a sub-specialty within their specialty. It is important to ensure protection at the sub-specialty level, not just the specialty level. For example, gastroenterology is a sub-specialty of the internal medicine specialty. If your group LTD coverage protects your general specialty, but not your sub-specialty, you could be at risk. Check your policy or ask your broker or carrier.

4. What is the rating for my medical practice liability carrier? Is it an A+? Or, did you go with the low-cost option? Remember that with so much volatility in the market, a move toward the cheapest carrier may leave you open to risk, should the insurer fail - and several already have. Your broker can help you answer this question and may be able to show you how to double your coverage while still lowering your rate.

5. Do I retain consent to settle a malpractice suit? When it comes to your livelihood, your reputation, and your future, you should be the one to call the shots - not an insurance bureaucrat who may have never even met, or spoken to you. Look for carriers and brokers who will support you and will work with you to vigorously defend claims if needed and who will not settle any claim without your consent.

6. What does my insurance carrier do to help me become a better physician, and to reward my efforts to improve quality and outcomes? Insurance carriers know the physicians that work on quality outcomes - those who ensure patients have the appropriate test when scheduled, who follow up on labs, who have excellent charting habits, and who take other basic steps to lower risk. Physicians who have those characteristics should be rewarded for their efforts. They should also look to their insurance provider for insight, guidance, and tips on how to further lower risk.

Of course, those aren’t the only questions to ask. And of course, the real solution lies with what you do with the answers –-and the changes you make. But asking these questions will get you started in an important area you can control today.