Developing premium based upon individual clinical practice of medicine (direct patient care within the specialty)
The Doctors’ Insurance Agency over 25 years has managed the Medical Malpractice Insurance Policies for thousands of physicians). Ninety percent of our physician liability insurance policies cover doctors practicing within their medical specialties- full time in clinics, hospitals or medical offices. These policies are rated by insurance company actuaries developing premiums after studying the claims in those individual specialties.
Sufficient Premium for clinical practice bodily injury resulting from alleged medical negligence claims
The actuaries develop premiums by studying claims history in the specialties overall (nationwide) and then, in particular in the state and county of practice; studying the frequency and severity (average claim cost) in each medical specialty and determining the first five years of premium based on those variables. This model always seems straightforward and makes sense to me; premiums to buy insurance for cars, homes, condos, renters, life, disability all use variables like this to measure and logically price the product
Medicalical Specialties : Risk = Premium
In medical malpractice insurance, it makes sense that different patient care corresponds with appropriate high and low premiums depending on the risk and potential for complications in the procedures and practice of medicine. It stands to reason that a high risk Ob/GYN practicing in a busy city might have higher claims exposure than a part time specialist in dermatology or allergy medicine in a rural area.
Clinical Work was insured, Medical Director Administrative work was not:
The one thing that did not make sense (at least intuitively) is that our many requests to add medical director work to these policies was often declined. The underwriters would tell us that the claim trigger in order to activate a medical malpractice insurance policy needs to involve a bodily injury resulting from direct patient care; in other words, administrative medical service (no patient care) is not actually risky enough? ….this work is not contemplated in the conditions that govern insurance coverage for these policies; The physician liability policy that needs to be in place to cover this type of work needs to be custom written (usually handled in the excess and surplus lines markets) so the underwriters and policy developers can write the language to respond directly to the risk as it is described in the application for medical professional liability insurance.
Increasing Medical Director Contracts increasing gaps in medical professional liability insurance.
And, this was becoming a problem (or a challenge) because The Doctors’ Insurance Agency insures so many physicians, and an increasing number of them were beginning to take on this interesting work outside of their clinical conventional medical group; The work is stimulating and offers a semblance of independence.
It was becoming increasingly common to see our insured physicians signing contracts to perform medical director work without patient interaction as a means of supplementing their income, only to receive these consistent (and confusing) declinations from their ‘med mal’ carriers.
Whether performing administrative and managerial tasks, ensuring quality care is delivered by health care allied, midlevel or other provider teams or acting as attending physician (providing direct patient care), the dynamic responsibilities of Medical Directors would be declined and needed a separate solution.
The medical supervisor, administrator claims generate from the legal theory of ‘respond at superior’ (the authority and the connection to the care team) puts the medical directors in the ‘arena’ which can develop more claims because as the center and supervisor of medical service, you’re exposed to more cases.
Why can’t the facilities, surgery centers and clinics for which you’re doing this work at least insure you?
The Doctors’ Insurance Agency first began working on this problem of finding the Medical Director Professional Liability by deferring to the facilities, to the businesses, medical centers, rehabilitation centers, etc. asking our physicians to confirm that they were included in the professional liability insurance written to cover the facility and the officers, directors, owners (including the medical directors).
However, this is a flawed solution because relying on employer-provided insurance by a long-term care facility can result in serious gaps in coverage.
We found that coverage can be inconsistent from one facility to the next. Some may cover only administrative duties and not patient care—others may exclude coverage for Medical Directors altogether. And you may risk being uninsured if a facility doesn’t offer extended reporting coverage for past claims if you terminate employment. In other words, there was no tail if there was any professional liability insurance at all.
Tail should be ‘built in’ to the facility liability insurance but often these health care entities were buying the wrong type of liability (business or general liability) leaving the entire professional liability component to the physician medical directors. The fact is, if you work for multiple long-term care facilities, medi spas, wellness, integrative centers, having full coverage can be a real concern.
The Doctors’ Insurance Agency worked at this challenge of finding coverage for our medical directors: first with Medical Protective, sometimes with The Doctors’ Company, other times with Evanston, or now, working with the smart underwriting team at Program Professional partnered with Lloyd’s of London, these policies are now available, complete and comprehensive and usually available for $ 2,000 - $ 2,500 per month.
Portable Medical Director Liability Insurance Policies can follow you!
With your own personal Professional Liability Insurance policy, you are covered for all the work you do as a Medical Director—no matter where you work. Our medical directors can take their coverage with them to assure them that the administrative work is covered by one policy (which as stated above can also include indirect patient care, supervising other healthcare providers) of many different types of licenses and training.
A Single Policy Customized for Your Needs
Coverage is available for administrative duties as well as patient care—with liability limits that are commonly requested by facilities of 1,000,000 up to $3,000,000 aggregate per year. With this insurance, you tailor your coverage to fit how you practice.