Episode 019: Pushing the Limits

Speaker 1: You are listening to Your Practice Made Perfect; support, protection, and advice for practicing medical professionals, brought to you by SVMIC.

Brian: Hello, and welcome to today's podcast. I'm Brian Fortenberry. We're continuing today on our discussion from our last episode regarding coverage and policy when it comes to medical professional liability coverage with Charmy Shrode, who is the Vice President of Underwriting with SVMIC. When it comes to coverage, often these physicians practice, and now we have some certainly that are practicing with large corporations or large groups or others that are solely owned community practices or a practice with just a few doctors. The individual physicians, there's coverage there I'm assuming for them. Does it work that every individual has their own policy that covers them? What about practices and practice policies, or maybe a solely owned policy? How does coverage for that work? Are there different policies for that or does it fall under the same?

Charmy: That can really vary vastly among the type of employee contract you're in, the type of medical environment you're in. Also, across the states the trends are quite a bit different depending on where you are. I will try to focus more on the region in which State Volunteer is, in the south, in Tennessee and the areas around that. You find, as you've mentioned, you can be a solely owned practice so we'll start there. If a physician incorporated his practice and made it a PC or an LLC, when the policy is written the physician generally is the named insured but oftentimes his LLC or PC might also be named in that lawsuit. You will want to look at your policy document to find out if it will automatically extend coverage to your PC or your LLC. Sometimes you will find that a plaintiff attorney likes to sue an entity more so than they like to sue a person. Some of the philosophy around that is that it's harder to get compassionate about a brick and mortar building than it is about an actual physician that you might see at the grocery store or at church. You sue their PC instead of them individually, or you might sue both at the same time to make sure you're covering all your bases. Check your policy documents to make sure that it automatically includes or it somehow includes not only you but your solely owned entity that you're practicing under.

Brian: You're saying that some policies might cover that automatically or as an additional insured or an additional named insured, but not all do. Correct? You have to be careful and look at that.

Charmy: Absolutely.

Brian: How about in that scenario with the solely owned practice, nurses and office staff and even nurse practitioners that might be there, is this covered under their policy that they currently have? If so, how? If not, what do they do about that?

Charmy: Most policies will provide coverage automatically for the staff that is in support of your practice. For example, your receptionist, your techs, your nurse techs, those type of things are automatically covered. You'll want to make sure that the policy language addresses that but generally speaking you will find that's automatically provided coverage in that. You may say, well, why do they even need coverage? Say for example you send out for a patient to have a test done, mammogram for example, and it comes back in. You have a clerical person that gets that test back in and instead of noting it and sending it over to the physician to sign off on and to read, they just simply file it in the chart. Let's say something on that mammogram showed that they needed further testing but the physician never had the opportunity to see it because it was automatically filed in the chart. That's where the entity is going to get named and perhaps the support staff. Now, when you take it a step further you also have, generally ,in your offices in today's world a nurse practitioner or a physician assistant. “Allied health” is what it is often referred to. SVMIC refers to them as “extenders”. Those individuals need to actually have additional coverage endorsed onto that policy or a separate policy. You will want to make sure how the policy you're taking out will address those type of employed healthcare providers.

Brian: That is specified in the policy language itself, as who is covered and who is not covered then?

Charmy: Correct.

Brian: Do these employees, or what I think you called “extenders”, do they share limits? Do they have their own separate policy limits and how does that work?

Charmy: Again, that can vary by policy. That's another reason why it's important to actually look at the contract that you're purchasing to see how it's going to address that. SVMIC's policy on the allied health or the nurse practitioner, the extenders, you can apply for coverage for each one of those. At State Volunteer each one of those employees, once they're endorsed onto the policy, have their own separate set of limits. Now, that policy only covers them while they're working for that particular named insurer. If it's a clinic that they're employed by and you're putting it under the clinic policy or if they're employed by an individual physician and it's under his policy, it provides them coverage while working under their supervision or under that employment but it does extend a separate limit for each one of those allied health, those extenders. That's fairly uncommon in the professional liability world. Especially today, the trend is to put those allied health or those extenders under a shared limit. What that would mean is that all of those employees that you have are sharing in one single set of limits throughout that policy term.

Why does that matter? Well, if you take a fairly good sized practice and you have a physician that perhaps he has two nurse practitioners, and let's say they're working a couple of different rooms at a time, you go and see one patient, you check them in, you go to another room and you check them in. It's not likely, but it's possible that something could occur on each one of those rooms simultaneously. Let's say you're giving vaccinations and the vaccine that you're giving, you're using that vial of vaccine in each one of those rooms and you later determine that that vaccine was tainted or did not have the potency or something like that that happened. That is given by that nurse practitioner in one room, another nurse practitioner in another room. If you are sharing in those sets of limits, then those two nurse practitioner are now sharing in one limit for two different patients in which they rendered care for. At State Volunteer, each one of those nurse practitioners would have their own limit. In addition, the physician or the practice entity would also have their limit. That prohibits the physicians limit from being deluded by the need of the shared limit or of the other extenders.

Brian: That is so critical in understanding what your policy says because if you don't know what it says that could really be the difference in millions of dollars of coverage, just on some terminology in the policy. I think that is incredibly important. We could talk about it seems like a lot here that is packed into just differences in coverage. Maybe at some point we revisit that but as we wrap up today Charmy, give us just a few key points that say a physician, a policyholder that is currently out there that may be looking at their policy maybe for the first time or those that are getting ready to enter practice, maybe they're finishing up a residency or getting ready to move into a new area or change companies, what are some of the key components that they need to ask questions about to their new representatives or their company that their policy includes or doesn't include, and some key questions or key things they should understand in making that purchase decision?

Charmy: The first thing they would want to know is, is it a claims made or occurrence form? The second thing they would need to look at is who is the named insured? Are you purchasing your own policy and you are the first named insured or the named insured, or are you being endorsed onto a group policy? Let's say ABC Clinic is the named insured. They would actually be the first named insured probably, then you as a physician being endorsed on is a named insured. Look at the policy document and see if there's a difference in first named insured and named insured as far as rights and obligations and responsibilities. This comes into play specifically with consent to settle.

Brian: What is that?

Charmy: You will want to check the policy document to find out how they are going to address settlement of a claim. If you are in a position where a claim needs to be settled, then who has the responsibility or obligation or privilege to say, yes, this claim can be settled under this policy under these terms? If it is your policy and it is settled on your behalf, then you would want to have the right to say if that is being settled. One thing that is real important to understand, when a claim is paid on your behalf in today's world that loss payment is reported to the National Practitioner Data Bank and it follows that physician forever. A loss payment in some states will trigger a medical board investigation. In some states, that loss payment becomes viewable to the public and all of your patients will be aware that you just had a loss payment paid on your behalf. Right or wrong, that might be interpreted by the general public as being negligence on your part.

Brian: If you see somebody has paid an amount of money, you might think they might be a bad practitioner then.

Charmy: Sometimes it's the right thing to do to make a payment but the important thing is that you as the policy holder, you as the physician, has the right to say whether or not that claim should be settled or not. You'll want to check the policy documents to see first of all can the company settle without your consent, they believe this is a case that needs to be settled as opposed to taken to court and they just choose to settle it. Or do you the physician have the right to say if the claim is going to be settled, or does that defer to your employer or the first named insured on the policy? Who actually has the right to say if a claim is going to be settled on your behalf? That is real important.

Brian: To me, that would be huge because you might find yourself in a situation where you have a claim settled and you didn't have a say. Then, as you said, this National Practitioner Data Bank or all of a sudden you get a board investigation in some states based on the settlement and you really never had a say in it, to me that would be very key to understand if my policy... Now, SVMIC's stance on that is what?

Charmy: The named insured has the right to say whether a claim is going to be settled or not. The way State Volunteer's policies are written generally speaking is each physician has their own individual policy. They are the named insured and they have the right to say how their policy and their claims are being handled.

Brian: Any other key components that you can think of? We've really hit a lot of information today. It sounds like you need to know probably what kind of policy you have as far as claims made in occurrence. You probably need to know some limits and how that applies. This consent to settle you were talking about seems to be incredibly important and, just the policy language in general, you probably need to know how either exclusive or narrow that is or how broad it is and the intent behind that. Correct?

Charmy: Correct. In addition to those things also, as we previously spoke about, you want to make sure what triggers coverage.

Brian: Oh, yes. That's right.

Charmy: What is your claim trigger for your coverage, and then what is your right to purchase tail coverage should you choose to terminate that policy? Those would be some of the main things. There's a lot of other small nuances in a policy that we could go on and talk about for days, but those are the big things that you would want to make sure that you look at. I would like to say the most important thing is not all words on the page are the same. It's important to understand what the policy contract actually says. I would also suggest you look for yourself as to what the policy document says instead of just someone's interpretation. If you're speaking with an agent or a broker, most of them are going to be very forthright and very knowledgeable on the policy and will be able to show you exactly where in the policy language it addresses your specific question. I would ask to see that as well to make sure that you see it for yourself as to how that policy is going to be responding directly. Again, it is a contract. It is a binding legal contract and the words on the page matter. I would encourage you to take a few minutes to read through the policy. You're going to see some heart around the policy and around the company in which you're choosing to put your reputation in the hands of. It is more than just a slight thing to consider. It is something very important to take just a few minutes to read through.

Brian: If you have questions about your current policy, if you're a current SVMIC policyholder or even a physician listening to this that either doesn't have a policy with any company yet or are considering getting a policy, they can to reach out to SVMIC, contact the Underwriting Department and get additional information or questions that they have concerning this. Charmy, really appreciate you being with us today. Thank you for all the information.

Charmy: You bet. Thank you.

Speaker 1: Thank you for listening to this episode of Your Practice Made Perfect with your host, Brian Fortenberry. Listen to more episodes, subscribe to the podcast, and find show notes at SVMIC.com/Podcast. The contents of this podcast are intended for informational purposes only. They do not constitute legal advice. Policy holders are urged to consult with their personal attorney for legal advice as specific legal requirements may vary from state to state and change over time.