Hospitals may limit their policies, to cover just the Hospital. Physicians’ better choice: Keep your malpractice policy!

Malpractice Insurance Carriers, Companies will change some of the language in their insurance contracts governing claims against Hospitals.  These bundle of claims (bundling nurses, surgery centers, the hospital itself, the physicians, and other entities within the hospital care system) have driven up the ‘per claim’  settlement or demand, and these high costs of claims comes at a time when the hospitals are boldly handling a lot of this insurance themselves,  many of them carry high, $ 3 Million and up, limit the impact and effectiveness off actual insurance policies, the transfer of risk vehicle used by so many to protect their finances.  Suddenly, these hospitals find themselves cutting right through their layer of self insurance, reaching the hospitals ‘insurance policy (re insurance policy) much later.

As Hospitals realize that this is a very costly way to do business, they will do two things;  they will reduce, somehow limit the hospitals insurance, possibly excluding  practitioners and entities, facilities that they are willing to insure;  and, they will reduce the size of their deductibles.

Batch claims can result from a single surgeon performing a procedure that is defective; on a number of patients (from 3 – 100 +); a nurse infecting patients or even food poisoning.

The Insurance companies will become more and more interested in risk management procedures to prevent batch claims. And, the fight is almost certainly uphill as the incidents of batch claims will almost certainly climb as millions of uninsured’s gain access to care under healthcare reform.  The hospitals will hire more physicians, raising the simple numbers, the actuarial odds of an error spreading throughout a number of patients. The answer offered by the government is to enact more strict monitoring of the types o and the amounts of procedures  performed.  The strict monitoring of procedures reduces the likelihood of physicians performing unnecessary procedures to increase revenue.

Insurance Companies can become instant adversaries with their insured hospital clients if the ‘batch’ provisions don’t clearly define that these multiple claims stemming from the same procedure are all covered.  A lack of strong batch language can leave a hospital facing financial peril;  Additionally, the insurance company may make a request that the court rule the hospital’s insurance policy unenforceable against batch claims originated from a renegade surgeon’s experimental procedure.

Accepting ‘batch’ claims is fairly new to hospital insurers, it wasn’t thought necessary or desired about a decade ago;  the Carriers have started to offer this to be more competitive in the ‘soft market’.  To reduce the exposure, some hospitals are specifying exactly which incidents, resulting in batch claims will be covered.

The Doctors’ Company Hospital Professional Liability Insurance policy will provide some type of batch language addressing multiple claims, related acts, or other batch wording. 

In addition to reducing the exposure to these ‘batch claims’, insurance companies are recognizing that another by product of the expanded universe of health care coverage is that physician assistants will become a large growth sector for medical malpractice.  Accountable Care Organizations will rely on Physician Assistants because the health care industry will have new types of delivery of care required under the  new expanded legislation.  In order to meet the demand of more patients, physicians will have to step away from the day to day and allow Physician Assistants to step in and develop deeper, primary care giver relationships with these many patients.

The reality is that medical malpractice carriers are going to be attracted to this niche because there is real demand and real risk management and claims management services needed.

And, just as insurance carriers are concerned about ‘batch’ claims affecting many patients and influencing the cost of claims payments by hospitals, so too will the increased responsibilities of physicians’ assistants effect the rates and claims experience of PA’s, this previously lower risk class of business. Look for rates in this class to increase during the next three years as policies mature and loss histories develop.  American Medical Group Association figures indicate that PA’s category of providers grew by 21 percent last year,  new positions are created, there are more than 84,000 certified PA’s in the Unite states, reflecting a 100 % increase in the last ten years. 

 

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