National Liability Insurance for Medical Directors

October 22, 2015

From Hawaii to Maine our agency provides unique specialized liability insurance policy for medical directors. Ironically, many insurance companies that specialize in providing medical malpractice insurance for conventional practices (those that are defined by the American Board of medical specialties) often do not want to ensure the work of the medical director because that work is outside of the group. For example an orthopedic surgery group practice might have a principal or partner wishing to serve as medical director for a local paramedical unit. They are often times stuck in “no man's land” as the paramedical company doesn’t want to provide coverage for the medical director exposure and the medical malpractice group insurance policy will also not cover the medical director. We specialize in finding a policy that carves the medical director exposure out separately.

How much Medical Director Malpractice Insurance cost?

It is important to note that these policies are claims-made policies. That is to say that the premium covers claims presented while the policy is in force and does not consider future claims reported after the policy is cancelled. Occurrence policies by contrast do include the future costs in the calculation of the premium and, therefore, they are more expensive. Think of it as paying off your property tax every month along with your mortgage payment. The beginning cost of the medical director policy is $2500 including that future tail cost ,not contemplating indirect or direct patient care.

Indirect patient Care:

Medical directors often find once they have mastered the role of providing oversight and supervision of the mid-level providers, medical assistants, technologists and even medical doctors providing services at facilities they find other opportunities that present themselves to provide indirect patient care. They should set limits within their contracts and use the limitations designed for healthcare clinics as a guide.

Physicians should be cognizant of the number of Directorships they contract for and not retain more than five medical director positions at a time. Again, even though there are no clear restrictions on the number of facilities, more than five may be too large of a number depending on the size of the facility.

The service requirements must be reasonable as Medical Directors need sufficient time and resources to manage issues such as appropriateness of care, quality of care, and medical necessity.

Tail coverage for Medical Directors:

Asking the facility for which you are providing medical director services about their malpractice coverage is a good idea if you are included on their facility policy and whether or not tail coverage is provided when your contract expires. If tail coverage is not included, there is an affordable market available which our agency has helped to develop. We have worked hard to place over 35 policies across the country for specific medical director services. Each one of them is written on a claims-made basis and provides an opportunity to purchase tail, extending your ability to report claims from 1 to 5 years after the cancelation date. This coverage is available and affordable.

If you take a job with a medical group or hospital, and the employment contract states that the entity will purchase malpractice coverage for you, it sounds like you're all taken care of, and you don't need to worry about anything, right?

Not necessarily.

In a recent NJ Appellate decision, the court held that a physician-employee was responsible for purchasing her own "tail" coverage on her medical malpractice insurance policy when she terminated her employment . As is often the case in these contracts, the agreement was ‘silent’ on the tail issue. The employer medical practice had a contractual obligation to "provide and pay the premium for malpractice insurance coverage covering Employee," but the contract did not specifically address extended reporting period (tail) coverage.

Medical Director Coverage provides security and flexibility (and more remuneration)

Just as with any contract that provides more compensation when the doctor brings their own medical malpractice insurance there are medical director contracts that pay more when there is an independent medical director liability policy in place. Therefore, it might be worth pursuing the belts and suspenders approach which means the facility for which you are working with include you in addition to your own policy which allows for you to quickly respond to opportunities, sign the contract after your appropriate review, and begin work. Remember the Doctors Insurance Agency has worked hard to develop specialty carriers across the country to respond quickly with an affordable comprehensive policy.