To our surprise, coverage through The Doctors Company was denied.  The basis of the declination was the insurance company’s underwriting opinion that the MILD procedures was a “surgical” procedure and not included in the scope of practice for a pain management physician.  Assuming the easy solution entailed simply increasing the medical specialty classification to one the underwriter agreed included this exposure (in other words: higher premiums), a request was made to change the medical specialty classification.  This request was also denied as the carrier’s underwriter opined the procedure was intended to be performed by surgeons only and thereby they would not extend coverage under any circumstances.

The next step was to determine if other carriers might be able to extend the coverage for the client to perform the MILD procedures while maintaining the same or better coverage and pricing already in place.  After several inquiries and submissions and many, many conversations explaining the procedure, coverage was offered with another insurance company willing to extend coverage for the doctor to perform the MILD procedure within his practice.  All in all the additional premium to the doctor is $1,500 per year to include the MILD procedure.  A satisfactory result for all those involved.

As always, it is wise to contact your qualified medical malpractice insurance broker to determine whether you have the coverage you need.  Never assume your medical malpractice insurance covers you for any new procedures, contracts, locations or healthcare providers. As a matter of course, we will always look for the best coverage at the best price by querying several sources for you. We do all the running around so you can concentrate on what it is you do!

Consider securing coverage that allow for some flexibility in the rating base to better accommodate individual and group needs.  For example, Medical Protective offers an occurrence-based, group policy that allows for a built-in tail if turn-over is likely.  The Doctors Company on the other hand can offer a group FTE policy with individual physician limits.  As yet another option, various companies are willing to offer a per encounter policy – though the drawback is the possibility of an audit billing at year end.

The coverage options are varied and complex and worth taking the time to understand.  In the end, intensivists MUST consider price, coverage, and carrier stability or face the risk of unexpected insurance expenses over the long haul.

Presidio Insurance Solutions – the experts in medical malpractice insurance solutions.

www.PresidioInsurance.com

The state of California attempts to provide consumers with the information they need to obtain coverage from an insurer they deem financial stable.  Generally, the total written premium (all the money to be collected on policies the company issues to health-care providers like physicians and surgeons) and the incurred loss (a figure which represents claims paid out by the insurer plus this figure can include an adjustment for reserves set aside for claims to be paid) can provide a picture of medical malpractice insurers financial stability.  However, actual financial documents are also available on the insurance department website for further inquiry into the financial stability of any medical malpractice insurance company.

The Doctors Company easily topped the group market share list of medical malpractice insurance companies in California with over $200 Million ($210,609,883) in written premium.  Norcal Mutual Insurance Company a distant second with over $150 Million in written premium.  Medical Protective, the Berkshire Hathaway company, comes in at just under $30 Million in California.  Its worth noting  The Doctors Company acquired SCPIE (AHI) and this acquisition is reflected in thewritten premium, and Berkshire Hathaway remains strong on a national level though the California market share reflects a conservative and stringent underwriting approach offering medical malpractice insurance only for the best of the best.  A newer player in the medical malpractice industry, Fairway RRG reported just over $7 million in written premium for all of 2009 (and even more worrisome is the Fairway RRG incurred losses reported of over $3 Million for 2009).

California market share data should be considered prior to purchasing medical malpractice insurance - lest you find yourself with a medical malpractice carrier touting great discounted rates without the money to actually pay the claims.  With the exorbitant costs of medical malpractce insurance, you definetely need to consider if you get what you paid for.  Always, always, always check the AM Best Ratings and financial data before purchasing a policy because in medical malpractice insurance there is always safety in numbers!

However, with the proper training credentials verified, some medical malpractice insurance policies will extend coverage to OB’s and Gynecologists performing aesthetic procedures such as vaginal rejuvenation.  Presidio Insurance works with Medical Protective, The Doctors Company and Norcal Mutual Insurance who will generally consider extending coverage for some of the following aesthetic procedures: Tumescent Liposuction, Botox & Fillers, Cellulite treatment and Vaginal Rejuvenation Therapy, which can be done surgically or minimally invasive with lasers.   Laser Vaginal Rejuvenation Therapy can be done within an hour in the practitioner’s office and the convenience of a  very short recovery period.  However, this is a procedure that only recently has grown in popularity and many medical malpractice insurance policies are not designed to cover it. 

Anytime there is a change in scope of practice, removing or adding procedures, staff or even contracts, it is a good idea to check with your medical malpractice insurance broker and confirm your policy provides coverage. 

 Visit us at www.PresidioInsurance.com for more information on this coverage or call us directly at (800)317-6411.

Presidio Insurance is looking into finding a solution to this problem. We will keep you posted as our research develops!

For profit , or non-profit we will do all we can to find you quality, cost effective medical malpractice insurance coverage.

Increased freedom for physicians who may need to move from one state to another for practice opportunities. It is frequently a problem to have a carrier in the new state provide prior acts coverage for services provided in another state Group practices may find the occurrence coverage form the way to go when hiring a new practitioner. The group and the physician may not be compatible and the occurrence form makes the trial of a new physician a cleaner and less complicated situation for all.

Occurrence coverage may provide a physician with the availability of more limits to cover claims arising out of services provided in multiple practice years.

Although claims made coverage may provide free tail coverage for physicians who die, are permanently disabled, or retire and meet the vesting requirements, there are many instances when a physician has to purchase tail coverage. There is no need to purchase tail coverage when the occurrence policy is canceled, no matter what the reason. I recently met a physician who canceled a claims made policy and was not financially able to purchase tail coverage at the time. He experienced difficulties obtaining new coverage due to this bare period. This would not have been an issue had he had an occurrence policy.

Carrier Choice Counts In More Ways than One. Faced with choosing between several insurance companies, new physicians often make poor decisions based entirely on the cost of the policy.  While price is an important consideration, (especially since new physicians often have a heavy debt burden to repay,) coverage is equally (perhaps more) important.  Again the key is to look at the matter in on a long term basis, rather than simply asking “how much will I pay this year?”

It cannot be stressed enough that working with an insurance professional to explore all the different options out there is the only wise thing to do.  This is the one time a physician is definitely in the position to choose from any of the top rated insurance carriers, yet some new doctors make the mistake of choosing to save a few hundred dollars and get coverage through Risk Retention Groups (RRG), or Captives or other similar ventures.

Here’s the scenario:  As a new physician, Dr. Smith is told the malpractice malpractice insurance average premium will be $25,000 a year.  In an effort to reduce the cost, Dr. Smith decides to obtain coverage from a risk retention group, because a colleague mentioned that they were really cheap.  Not understanding much about the coverage, Dr. Smith is thrilled to get a quote for “only” $19,000 and writes a check before even reading the contract or doing any research.

Six months later Dr. Smith is named in a lawsuit which lacks merit.  Dr. Smith is is given no choice or input on the choice of defense counsel (the risk retention group saves money by having one attorney firm handle all claims).  Dr. Smith is also not consulted when the case is settled on for $250,000 (the RRG includes a clause in the contract that clearly gives them the right to settle a claim without Dr. Smith’s consent).  To add insult to injury (and damaged reputation,) Dr. Smith receives a non-renewal (cancelation) letter from the RRG due to the $250,000 payout.  In a panic, Dr. Smith finally calls Presidio for help.  (Please refer to this blog post for What do Do when you’re being non-renewed).   We can help guide this new doctor towards better choices in the future, but it’s too late to take back the poor choice of not getting a free consultation from Presidio in the first place.

Initial savings?  $6,000  Net cost?  Untold, as the average premium will be higher and the cost of a damaged reputation can’t easily be determined.  Cost of giving Presidio a call before buying a policy?  Free, yet priceless!

New Physician Malpractice Insurance Article Series

Part 1 – New Physician Insurance Scenarios
Part 2 – New Physician Insurance Strategy
Part 3 – New Physician Insurance Risk

2) Consider the longer term strategy and seek advice from an insurance professional. New physicians qualify for substantial discounts on professional liability insurance for the first 3 years in practice.  Keep in mind the term “new physician” can include physicians completing military service, coming to the US for the first time, working at a county clinic, even completing work in a Kaiser facility or on a research grant.  The “new physician” discounts can vary between 15% and 75%.  Rules also differ amongst the various companies as to what constitutes a “new physician”.  You’re well-served by asking the question beforehand, since the rules for Norcal Mutual Insurance Company may be more flexible than The Doctors Company or Medical Protective, for a couple examples.

Here’s the scenario:  Dr. Smith has finished residency and eventually plans to open a private practice.  For the time being, though, Dr. Smith is considering a job with either a county clinic or a private medical group.  Both offer medical malpractice coverage and (having read the first segment of this series), Dr. Smith makes sure there won’t be a cost for a tail policy.

While caring for patients at the county clinic is rewarding, the private medical group offers $10,000 more per year and Dr. Smith joins the medical group.  After 3 years Dr. Smith decides to leave the Group, ready to start a new practice.  Here’s where it gets tricky: Dr. Smith went to work for the private medical group for her first 3 years of practice, thereby the group enjoyed the benefit of the “new physician” discounts.  (Remember that the group agreed to pay for the policy.)  Premiums paid by the Group were $6,250 the first year (75% discount), $12,500 the second year (50% discount) and $18,750 (25% discount)  the third year.  The total premium savings on “new physician” discounts gained by the Group is $37,500.

Dr. Smith now applies for a policy for the new practice, but the “new physician” discounts have already been enjoyed by the Group.  Dr. Smith’s premium is now $25,000 for the first year in practice (this is Dr. Smith’s second largest monthly expense after rent).  The rules state that Dr. Smith no longer qualifies as a “new physician” because private practice was actually entered into when work for the Group began.  Had Dr. Smith worked at the county clinic for 3 years, the new practice would have been eligible for the “new physician” discounts, but …

Dr. Smith earned a total of $10,000 per year for 3 years, or $30,000 in additional salary — less taxes — which comes to about $24,000.  The loss of discounts equates to $37,500 in additional premium costs for the new practice, and comes at a time when that new practice can least afforded it!

$10k per year x 3 yrs = $30k, less taxes = $24,000
Extra premiums paid by the new practice = $37,500
Net loss to Dr. Smith:  $13,500

Good advice from Presidio? Priceless!

Check back for the third and final segment on professional liability insurance!

New Physician Malpractice Insurance Article Series

Part 1 – New Physician Insurance Scenarios
Part 2 – New Physician Insurance Strategy
Part 3 – New Physician Insurance Risk

The first of three parts, this series addresses issues every new doctor should be aware of.

Each year at the end of summer, we find a fresh crop of recently licensed physicians seeking positions within medical groups and establishing their own new practices.  If you’re one of them, congratulations!  All that hard work is finally going to start to pay off!

Whether coming on with an existing group or hanging out your own shingle, you’re about to be barraged by a stream of unanticipated and unfamiliar details, things left for “Later” while you were focusing on your medical education.  Here’s a bit of practical knowledge to help avoid potential pitfalls in your blossoming career.  Protect yourself by understanding your medical malpractice insurance options. Professional (Medical) Malpractice insurance is an essential part of any practice or business.

Consider these scenarios, which every new physician can learn from:

1) If you’re joining a Group, be sure to review your contract and understand the financial implications of cancelling an insurance policy, should you choose to leave the group.

Here’s the scenario:  Dr. Smith completes Residency and goes to work for ABC Medical Group.  ABC Medical Group agrees to provide the doctor with medical malpractice insurance coverage while part of the Group.  Unfortunately, Dr. Smith quickly becomes unhappy with ABC Medical Group and decides to take another job offer, (or set up a new practice which is better able to serve patients.)  Pursuant to the terms of the contract between Dr. Smith and ABC Medical Group, Medical Malpractice insurance coverage ends once Dr. Smith leaves the group.  The contract is silent on the issue of coverage for lawsuits that arise from patient contact while with ABC Medical Group, though the suit wasn’t filed until after doctor left the practice.  Only when the suit is filed does Dr. Smith realize there was no protection against litigation once they parted ways.  To remedy this and help poor Dr. Smith, ABC Medical Group’s insurance carrier offers Dr. Smith an extended reporting policy (often referred to as tail coverage) which can be purchased for a mere $8,000 (which must be paid in full within the next 30 days).  Dr. Smith did not anticipate this expense, and now has to figure out how to come up with an extra eight grand in a month.  Not the best news of the season.  Had the new doctor gotten a free consult with Presidio ahead of time, potential pitfalls like Tail Coverage would have been brought up, saving a lot of stress and eight thousand dollars.

Check back for the next installment, Long Term Strategy!

New Physician Malpractice Insurance Article Series

Part 1 – New Physician Insurance Scenarios
Part 2 – New Physician Insurance Strategy
Part 3 – New Physician Insurance Risk

The Mayo Clinic performed a study which found that physicians who are sued often begin a downward spiral of self-doubt which extends far beyond hurt feelings. The standard of care slips. Doctors begin to doubt themselves, their medical skills, diagnosis… Any and all of these aspects may come into play as the doctor is drawn farther into the legal process, leading to depression. Depositions, court appearances, patient and expert testimony, these are just the beginnings of a process which saps the healer’s strength, leaving the patient case load to pay the price.

When a frivolous lawsuit is filed, the doctor’s quality Medical Malpractice coverage usually kicks in, covering the direct costs of the defense. But it doesn’t cover the indirect costs and expenses, such as the time away from patients to give statements, make courtroom appearances, and the like. The physician is draggged through the muck even when he or she is entirely free from fault, to defend against the allegation. Of course, we all pay for the direct costs of defense, and any settlement which might be agreed upon or awarded. What’s less well known is that the doctor’s other patients are also suffering because of it as well.

As our leaders contemplate ways to get control of runaway medical coverage costs and provide affordable healthcare for all of us, the prices paid for frivolous, baseless lawsuits must be considered as well. Some physicians have become proactive, turning to organizations like Medical Justice for support. Dr. Jeff Segal, founder of Medical Justice, is determined to get put this ugly assault in check. One way that this organization does so is to counter-sue the patient as well as the attorney, seeking restitution for the loss of income, damage to reputation, etc., which are all results of a false or inappriopriate claim being filed.

This approach may not appeal to everyone, but if we are to get a grip on the “sue me” mentality and allow physicians to return to their job as healers, we — as a society — are going to have to stand united against false claims. A physician is not a pinata, to be poked and swiped at in hopes of recieving free treats. As we demand a high degree of excellence from them, we must also afford them protections against such disrespectful and unappreciative perspectives as would motivate people to sue without just cause. We should do so because it’s the right thing to do, of course. But it goes far beyond that when the false allegation affects the physician’s ability to provide quality health care.

We may forget, sometimes, that the doctor is a living, breathing, feeeling human being who feels the bite of that betrayal most sharply. It’s high time we all stood up against those who choose to make their doctor the enemy. Those who view a medical malpractice suit as a winning lottery ticket are costing us all in ways we can’t afford, ways most don’t ever even think about.