Tag Archives: Choosing insurance

5 Things Psychiatrists Should Avoid When Buying Malpractice Insurance

You have insurance coverage.

You received the lowest rate and have the certificate of insurance.

You are properly insured, right?

Perhaps not.

Here are five of the most common issues you should avoid when choosing a policy.

 1. Not having enough licensing board defense coverage.

PRMS is seeing increased licensing board activity for many reasons such as aggressive boards, greater public attention, easy online access for the public to make complaints and the state’s obligation to investigate all complaints.

Some policies include a basic limit to defend against a board investigation and then charge more if you want higher limits.  PRMS knows the importance of protecting your license and reputation so our policy includes a separate limit up to $150,000 at no additional charge. 

 2. Only one policy type to select from.

Some companies only offer claims-made policies.  However, PRMS offers you a choice.  There are two common policies to consider.

Claims-Made:  This policy protects you in a practice-related legal proceeding if the policy is active when the “claim” is “made” against you during the policy period.  The limits of liability in effect at the time the legal proceeding is made will apply.  If you cancel your policy, you cannot report legal proceedings and should consider additional coverage to extend the reporting period – this is commonly called tail coverage. 

Occurrence:  This policy protects you in a practice-related legal proceeding if the policy was active at the time the treatment or incident occurred, regardless of when the lawsuit is filed.  You don’t need to buy tail coverage with an occurrence policy. 

We will explain your options so you can decide what works best.  Also, PRMS waives tail coverage costs in certain cases such as retirement, longevity with the program, death or permanent disability. Learn more about tail coverage here.

 3. Speaking of tail, some insurance companies have limited options for waiving tail coverage costs.

Tail coverage can be expensive.  The good news is that if you have a claims-made policy with another company, you do not need to buy your insurer’s tail because you may transfer your retroactive date to a policy through PRMS.  

Some companies waive tail costs only if you retire, become permanently disabled or die.  PRMS also waives tail costs for those reasons (retirement means permanent retirement after 5 years’ continuous coverage at age 55+).  However, we also waive tail costs if you maintain a claims-made policy for 10 consecutive years (presuming you are claim free or had no surcharges for claims on your policy).  In most states, we count your previous companies’ claims-made policy years toward the 10-year rule.

 4. Choosing an insurance company with risk management services not specifically designed for mental health.

Other companies usually comingle psychiatry rates and policies with other specialties. In terms of risk management advice, multi-specialty companies can generalize their educational material focused on primary care physicians/surgeons due to their large numbers and higher risk.  As a result, you may not receive enough advice for mental health.

PRMS policies and services are designed for psychiatrists and groups of psychiatrists with allied behavioral healthcare providers.  We are committed to psychiatry-specific risk management services.  We believe risk management – and complimentary access to information and CMEs (PRMS is ACCME accredited) – are essential.  Our advice is based on our superior experience in managing psychiatric claims, lawsuits and significant events for over 30 years as well as addressing about 70,000 psychiatric risk management questions and issues.

 5. Selecting an insurance company that doesn’t have psychiatric claims experience.

At the end of the day, it is about results. Will your company be there for you and act in your best interest when a claim is brought against you?  Do they normally manage psychiatry claims?  Does your company outsource claims defense?

In the over 30 years of our program’s existence, we have managed all claims in-house (no outsourcing).  Also, most of our clients’ claims are dismissed.

Choosing the right malpractice insurance can be a complicated and confusing process, but we are here to help you avoid these and other common pitfalls.

To ask a question or get a personalized rate indication, contact us at (800) 245-3333 or TheProgram@prms.com.

 

The content of this article (“Content”) is for informational purposes only. The Content is not intended to be a substitute for professional legal advice or judgment, or for other professional advice.  Always seek the advice of your attorney with any questions you may have regarding the Content.  Never disregard professional legal advice or delay in seeking it because of the Content.

©2018 Professional Risk Management Services, Inc. (PRMS). All rights reserved.

Actual terms, coverages, conditions and exclusions may vary by state. Insurance coverage provided by Fair American Insurance and Reinsurance Company (NAIC 35157). FAIRCO is an authorized carrier in California, ID number 3175-7.

Can You Cancel a Claims-Made Policy Without Buying Tail Coverage?

Do you have to buy tail coverage? Yes or No

Many medical professional liability companies only offer claims-made policies to behavioral healthcare providers like you. You are probably familiar with some common assumptions associated with claims-made policies:

–  A claims-made policy protects you against claims for an incident if the policy is active when the “claim” is “made”. Correct!

–  An incident must be within the coverage dates for claims-made coverage to apply. Correct!

–  You must purchase tail coverage if the claims-made policy is cancelled. FALSE!

False? Yes, false.

If you are currently insured with a claims-made policy from another company, you can transfer your current coverage (retroactive date) to your new policy – there is no need to buy tail coverage. By transferring your retroactive date, any claims that you would have reported to the former company may now be reported to your new company. In some cases, rates for retroactive coverage (also called prior acts or nose coverage) are lower than your current company’s tail coverage rate. A tail may be available to you at no additional charge, depending on the company, if you meet certain guidelines. For example, PRMS currently waives the tail cost if you:

–  Need to cancel coverage as a result of death or permanent disability, or

–  Permanently retire from the practice of medicine and are at least at age 55 and have maintained a claims-made policy for at least five consecutive years with PRMS immediately preceding retirement, or

–  Had 10 continuous years of claims-made coverage with PRMS if you meet underwriting guidelines

You may be currently covered under a group policy. Some group policies insure many providers and, depending on the nature of the policy (e.g., you share coverage with the employer), you may leave the group and not have to buy tail coverage. Or, you may have to buy tail coverage years later if the group policy is cancelled and the employer does not purchase tail for the providers. This may be very difficult to purchase from any insurer years later. It may be in your best interest to transfer your retroactive date to a new company and avoid this potential problem in the future. There are circumstances when you will still need to buy tail coverage:

–  You change jobs and your new employer provides insurance for you (e.g., hospital or university) or otherwise pays your coverage; however, they will not insure the retroactive coverage.

–  You do not immediately start a new policy. If you take a sabbatical or a break between jobs, you may not need new coverage right away. Offers to buy tail coverage may only last a few weeks so you may need to purchase tail coverage to avoid gaps that can negatively impact your ability to buy future coverage. Not buying tail coverage counts as a gap.

–  You want to transfer from a claims-made policy to an occurrence policy. Prior acts coverage may be available on an occurrence policy but there are no guarantees. Prior acts coverage on an occurrence policy can be expensive which is why most providers I work with buy retroactive coverage on another claims-made policy.

–  The new company does not offer retroactive coverage. If the new company does not insure providers from the state you moved from or there is an adverse history like claims, the new company may require you to buy tail coverage before switching.

You have choices! Even if your company says you must buy tail coverage, you may not have to do so. Contact me if you want to learn more at theprogram@prms.com or 703-907-3889.

Rich Stagnato, PRMS Account Manager
  Mr. Stagnato is responsible for new and renewal business, providing customer service, insurance counseling as well as obtaining competitive data on the medical malpractice market. He is a licensed Property and Casualty agent. Richard Stagnato rejoined PRMS in 2004 after almost a year as an underwriter at NCRIC. Prior to joining the company in 2000, he had been an insurance specialist for five years with the Boat U.S. insurance program.

 

Need Medical Malpractice Coverage. Now What?


A Guest Blog by Rich Stagnato, PRMS Accounts Representative

If you are not employed by a hospital or government facility, you will likely need your own medical malpractice policy.

You should research your medical malpractice insurance and risk management needs by reviewing policy and feature differences. Ultimately, you have to feel comfortable that the people you are buying your coverage from are the people you’ll feel comfortable working with in the event you need to file a claim (or talk about a potential claim).

Once you’ve made a decision, apply for coverage:

1. Contact us so we can send you an application by email, fax or mail. You can also download a copy at our “Apply Today!” section.

2. Write or type your responses on the application. You can type directly on our electronic application or apply over the phone by calling 800-245-3333 x389.

3. Fax, email, overnight or mail the application with a copy of your most recent certificate of insurance (unless you have been in training).

Forgot something? Don’t worry. We will contact you if anything is needed to complete the application process and cover you.

Rich Stagnato, PRMS Accounts Representative

Richard Stagnato rejoined PRMS in 2004 after almost a year as an underwriter at NCRIC. Prior to joining the company in 2000, he had been an insurance specialist for five years with the Boat U.S. insurance program. Mr. Stagnato is responsible for sales and procurement of individual new business, providing customer service, insurance counseling as well as obtaining competitive data on the medical malpractice market. He is a licensed Property and Casualty agent.

 

Buying Insurance (Oh, No!)

A nationally syndicated advice column last week dealt with the issue of how to politely but decisively suppress any conversation with a talkative stranger (in a waiting room, or on a plane, etc.). One suggestion: tell the stranger that you sell insurance for a living.

Alas, we in the insurance business have heard this before.  Insurance talk is boring and confusing at best, and depressing and scary at worst.

The reality is, however, that you do need medical professional liability insurance. It doesn’t simply fall into your lap; you need to go out and buy it. Permit me to chat BRIEFLY about buying professional liability insurance to protect yourself and your practice from allegations of negligence in the practice of medicine.

– Give yourself time to look at your options. In most states, there are several insurance companies offering professional liability coverage to physicians, and it’s wise to check out at least a couple of them (of course, one of the companies should be PRMS). We suggest you give yourself enough time to apply, pay the premium, and meet any renewal or credentialing obligations you have.   We can process an application in a matter of days.

– Think about the reality of practicing psychiatry. It’s a low-risk specialty in both the frequency of suit (i.e., how often the average practitioner is sued) and severity (i.e., how large the damages are when the average practitioner is sued). Accordingly, you may find that companies that insure all specialties don’t have much experience dealing with the risks psychiatrists face, because they tend to focus their efforts on the specialists at the opposite end of the liability spectrum – obstetricians, neurosurgeons, orthopedists. For more than 25 years, PRMS has offered psychiatric-specific coverage.

– Insurance should be more than a policy that you drop-file and hope you never need to utilize. PRMS risk management services for our psychiatrists include publications, seminars, and the Risk Management Consultation Service (RMCS), all focused on psychiatry. We want to be a resource you can call on whenever you find yourself facing a new or challenging situation. For example:
  – Should I terminate treatment of a chronically non-adherent patient? How do I do it?
  – What should I consider before committing to a particular electronic health record system?
  – My patient wants me to testify on his behalf in a lawsuit against his employer – are there any risks in that?

– Buy enough insurance, but not too much. How much is enough? This may be dictated by the health insurance panels you belong to, or the hospitals where you maintain privileges. Some states make the decision for you, requiring certain minimum limits of liability coverage. How much is too much? We can help you with this decision. The reality is, most psychiatrists still feel adequately protected carrying a policy that provides $1 million coverage for any one claim, and $3 million for all claims arising under their policy. We will be happy to discuss the details with you.

One more thing – we promise not to talk about any of this should we find ourselves sitting next to you on a plane.

Why Didn’t Anyone Teach This in Residency?

A Guest Blog by Rich Stagnato, PRMS Accounts Representative

Private practitioners who need to keep track of reimbursement for their services and maintain records can find that keeping track of medical malpractice policies can also be a challenge.

Some insurance companies promote claims made policies as the only or preferred option but, in reality, there are other choices available. Through The Psychiatrists’ Program®, we offer a variety of options. Let’s navigate them now.

An “occurrence” policy responds to claims resulting from incidents which occur during the policy period, regardless of when the actual claim is made. Coverage need not be in force at the time the claim is reported. It is only necessary that coverage was in force at the time the alleged negligence occurred. The main thing to take away is that you don’t need to buy tail coverage (a tail allows you to report claims that occurred during the policy).

A “claims made” policy responds to claims/lawsuits reported during the policy that occurred after coverage starts (retroactive date). As long as the “claims made” policy is renewed, coverage will apply. If the policy is canceled by you or the insurance company, tail coverage may need to be purchased. A tail at no additional charge may be available to those who meet certain guidelines. If you plan to stay with The Psychiatrists’ Program® long term, this may offer savings – sometimes significant savings. If you are currently insured with a “claims made” policy from another company, we can transfer your current coverage (retroactive date) to your new policy – there is no need to buy tail coverage. Therefore, claims you would have reported to the other company may now be reported to our program. In many cases, our rates for this retroactive coverage (also called prior acts or nose coverage) are lower than your current company’s tail coverage rate. A “modified occurrence” or “claims made with prepaid tail” policy is available in some states instead of an “occurrence” policy. With these policies, you can also report claims that occurred when coverage was in force. You will not need to pay any additional premium at the time of cancellation for the tail coverage.

If you want clarification how tails and noses (oh my!) apply to you – if at all – please feel free to contact us at (800) 245-3333 x389.

Rich Stagnato, PRMS Accounts Representative

Richard Stagnato rejoined PRMS in 2004 after almost a year as an underwriter at NCRIC. Prior to joining the company in 2000, he had been an insurance specialist for five years with the Boat U.S. insurance program. Mr. Stagnato is responsible for sales and procurement of individual new business, providing customer service, insurance counseling as well as obtaining competitive data on the medical malpractice market. He is a licensed Property and Casualty agent.