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Medical Doctor Associates Describes Approaches in Medical Malpractice Insurance

- What to Look for When Considering Temporary Positions?

ATLANTA - August 29, 2008 - "Tell me about your malpractice insurance coverage" – this simple interview statement will leave most physicians speechless. Today's physician can't afford to ignore the insurance requirements anymore. Mergers, rising claim payouts and the changing economy have caused changes in many major insurance companies, including a decrease in ratings and questionable financial stability.

The scope and severity of the medical liability crisis is sweeping across America. In 2004 there were 19 states classified as "crisis" states by The Coalition for Affordable and Reliable Health Care (CARH) and the American Medical Association (AMA). From the same studies, there are 24 additional states classified as "problematic". In 2002 there were 28 professional liability insurance carriers that failed, and an additional 22 companies failed in 2003.

Although Locum Tenens (LT) physicians are a leading source for hospitals to temporarily fill empty positions during emergency absences, few hospitals or physicians seem to have the time or desire to research malpractice options. Allowing a LT firm to do the "insurance homework" is risky business without also understanding the differences and requiring appropriate documentation from the firm.

Understanding the pros and cons of different insurance coverage is as critical to the hospital as it is to the physician. By providing the most comprehensive coverage available, the risk can be much lower for the physician and the hospital/healthcare facility. According to Medical Doctor Associates, Inc. (MDA), one of the nation's largest medical staffing companies, the appropriate professional liability insurance coverage can dramatically affect a physician's future employment opportunities.

"Malpractice insurance is a complex and complicated process," says Jim Ginter, President of MDA. "It requires under-standing the legalities of the insurance industry and keeping up with the changes, something that a majority of physicians may not know."

The two basic forms of professional liability insurance are Occurrence Form and Claims Made. Occurrence Form insurance provides coverage for professional services that occur during the policy period, regardless of when a claim is reported. Occurrence policies protect the physician and the healthcare facility for the life of the patient, which is extremely important in today's litigious society.

Claims Made policies provide coverage for claims that are reported during the policy period. However the provider is not covered for claims made after the policy expires, unless a "tail policy" is purchased. "All tails are not created equal," according to Ginter, "and it's imperative to know the differences." There are insurance companies offering claims made policies that are no longer writing tail coverage. There are no guarantees that "tail coverage" will be purchased by the locum tenens company. No law exists that compels companies to buy tail coverage.

Tail policies vary in the length they are in effect and can provide coverage one year from the end of the policy to an unlimited time period. They can also vary in the amount of coverage provided. Some tails provide less coverage than the original policy. An important element of a tail policy is the aggregate amount it will pay out over the life of the tail. This should be at least as much as the original policy.

Canceling a claims-made policy without a provision for a tail policy can negatively impact a physician's financial security and future employment. "It is essential to ask the locum tenens company what provisions have been made for the tail and get it in writing," explains Ginter. "The locum tenens company should be able to provide a copy of the policy denoting a pre-paid tail – this gives the physician added security and protection should an issue arise," he added.

Medical Doctor Associates has offered Occurrence Form Malpractice Insurance to contracted providers since 1991. "It is very different from the claims-made policy in that it gives the physician greater security for the future. Doctors and clients don't have to worry about coverage in the future." Ginter urges physicians and hospitals to ask a locum tenens company these questions regarding their claims made policy:

What provisions have been made for the tail? Has it been pre-paid?

How long is the coverage? (This should be at least as long as the statue of limitations in your state.)

What are the limits of the tail? How many other physicians will be sharing the aggregate limit?

Regarding occurrence form insurance, always ask to see the policy. Terminology today can be very misleading and many physicians believe they have an occurrence form policy when they actually have claims made.

Physicians also should find out the rating of the insurance company. The rating indicates the stability of the company and its business practices, as well as the company's reputation and reliability. Ginter adds, "Several insurance companies have been hit hard by soaring malpractice judgments, compromising the company's financial stability. It's important to check with AM Best or another rating company to determine the insurance company's financial strength. A rating of at least A- is suggested."

Learning about malpractice insurance doesn't have to be an intimidating experience. If researched properly, and with the expertise of a well-known Locum Tenens company, a new assignment can be a rewarding experience, both professionally and financially.

For more information about the growing trends in LT physician staffing and malpractice insurance, visit Medical Doctors Associates' web site at www.mdainc.com.