Telemedicine Medical Malpractice Insurance How is the Premium developed?

December 30, 2013

The rating of telemedicine medical malpractice insurance is dependent upon a few variables: The Medical Specialty, the Practice Territory, the number of consultations and the type of medical services provided. This is one of the niches in medicine, where the medical malpractice insurance cost is not determined simply by looking at the number of physicians and the medical specialty.

The annual premium for telemedicine accurately reflects the risk. The more services and consultations, the greater the likelihood of being names in a law suit. The annual premium increases with that increase in service.

The Doctors Insurance Agency works with telemedicine groups to help them track the information necessary to report these variables.

Our spreadsheets are designed to break down the important audit information to keep these premiums in line with growth of the group and the risk. Tracking this information to report to the insurance underwriters not only makes the job of the telemedicine chief operating officer easier, it is important in order to remain compliant and to accurately represent the basis from which the premium is being developed.

The insurance Carriers are relying on the administrators of telemedicine groups to report accurately, the physicians, specialty services, state where the service is being provided, the state where the patient resides, and the number of consults.

The beginning of the 12 month policy period the telemedicine group pays the premium based upon these predictions and projections, as the policy year develops, the group may expand and hire more physicians, they may contract to provide services in other states, the number of consultations upon which the premium 99s based may double, all of these changes are sorted our either quarterly or annually. Having this accurate and auditable number available is integral to the proper maintenance of the malpractice insurance policy.

Risk Management for Telemedicine Physician Groups:

In reading up on some of the risk management principals guiding the development of telemedicine, I came upon this information from Dr. Paul Hildebrand of Team Health:


There are many definitions of telemedicine: CMS, ATA, and the general understanding of the specialty.

CMS Defines :

The Centers for Medicare & Medicaid Services (CMS) defines telemedicine as “a two-way, real-time interactive communication between a patient and a physician or practitioner at a distant site through telecommunications equipment that includes, at a minimum, audio and visual equipment.”

ATA takes that definition of communication between a physician and statement further:

The ATA more broadly defines telemedicine as “the use of medical information exchanged from one site to another via electronic communications for the health and education of the patient or health care provider and for the purpose of improving patient care, treatment and services.” And, there is still another definition:..Dr. Hildebrand refers to as the global term…. any medical activity that occurs at a distance and utilizes some form of telecommunication.


As anyone who has ever used email can attest, electronic communications are not always as clearly delivered and received as face-to-face interactions. For telemedicine groups, the potential pitfalls of telecommunications can create serious problems, …

in hospital settings, for example, there are opportunities for delayed and missed diagnoses associated with teleradiology as the number of contracts with remote radiology groups providing services for the hospital has grown.

Work on the communication and handoffs within telemedicine groups and the distant sites.

there are, occasionally, lapses in clinical and contextual information that is necessary for teleradiologists to interpret scans. This deficiency suggests that teamwork between the facility and the distant site needs improvement.

As a result of these lapses in communication, The hospitals and/or radiology providers in question faced lawsuits resulting from negative patient outcomes. Working with our specialty insurance carriers, we can help your group manage the risk as you grow in this evolving field. It is important to look at the many areas of risk presented to telemedicine groups.

There are different categories of risk associated with telemedicine.

Protect your organization against Cyber Liability (Data Breach)

  • Privacy, Security and Patient Confidentiality. Healthcare providers participating in telemedicine have the same obligation of responsibility for the privacy and security of patient information as those providing face-to-face care, and they must abide by the rules of HIPAA and the HITECH Healthcare institutions should verify the security of a telemedicine vendor’s systems and operations in order to protect their patients’ information. Hospitals and physicians should also be wary of unencrypted communication platforms such as Skype or Google Talk, which do not allow for providers to protect against breaches.
  • Credentialing. Hospitals must ensure that telemedicine providers who are credentialed on the staff of a different hospital or whose licenses are from another state or country are legally permitted to provide services to the receiving hospital’s patients. In the past, the Medicare Conditions of Participation (CoP) have not permitted “proxy credentialing” for telemedicine services, requiring that hospitals fully credential all practitioners in the same manner, including those who provide telemedicine services from a distant site.
  • Informed Consent. Patients must be aware of and consent to the potential benefits and risks associated with telemedicine, including delays that could result from deficiencies or failures of telecommunications equipment and the potential for security breaches.viii Physicians should discuss the benefits and risks of telemedicine with patients before obtaining a signed consent form. Proof of informed consent should be documented in the patient’s record.
  • Maintaining Continuity of Care. Successful telemedicine requires more than just technology. The three essential components are the personnel, the technology and a liberal measure of perseverance. As with face-to-face encounters, documentation of telemedicine encounters must be diligently recorded. The Medical Record of the patient must be recorded and the documentation must be accurate and complete.
  • Reliable Technology. Hospitals should seek a reliable vendor. If the technology transmitting fails, liability could invariable result; Risk Management Best Practices directs groups to develop protocols for “accuracy of information transfer”….additionally, healthcare providers are encouraged to enroll the vendors of the technology in to this responsibility of the quality and functionality of technology.

Telemedicine is effective in improving the access to information and physicians:

Specifically two major areas of healthcare delivery can be effected: acute primary care and care of patients with chronic conditions. Telemedicine does not replace the role of the physician in attendance for escalating medical conditions (e.g., evaluation of a patient with chest pain or high fever), although providing telemedicine advice to the bedside clinician would be appropriate.

  • Rural Health Clinics: One of the greatest challenges in rural health is assuring that medical expertise is available where it is needed, when it is needed. This is difficult for remote rural healthcare facilities because they are often unable to attract, afford or retain specialty providers. Telemedicine helps solve these issues by allowing access to specialists regardless of location.
  • Telemedicine still equals Telephone: Although physicians consult with patients over the phone on a regular basis, there are some basic concepts to consider when expanding this function within a practice: make sure to train the clinicians at the front desk on the phone supply chain. In addition, two or more calls for the same condition within a finite period should prompt a different protocol, when the provider is not available by phone, the voicemail greeting should provide an alternative contact number for patients who need immediate assistance.