Medical Malpractice Insurance & Litigious America!

Medical malpractice insurance is a specialized type of professional liability insurance covering physician liability arising from disputed services that result in a patient's injury or death. Medical liability insurance is required by almost all states and most medical systems as a requirement to practice.

Malpractice insurance is generally available through traditional insurance carriers or from a medical risk retention group, a mutual organization of medical professionals organized to provide liability insurance (sometimes sponsored by state medical societies).

Additionally, some large medical systems may be "self-insured;" instead of purchasing commercial insurance, a medical liability trust fund created, used to pay for the defense of malpractice claims and any resulting judgments against their physicians. Although it is possible for smaller medical groups and practices to self-insure, there are significant legal and business obstacles that make this a difficult option for most.

Individual and group malpractice coverage plans are available for those in independent or small practices. Medical liability coverage is offered for employed physicians as part of a group plan purchased by the employing hospital or health system.

The optimal type and amount of insurance you need to meet your state's malpractice insurance minimum requirements and for adequate personal and practice asset protection may vary significantly based on your circumstances. Therefore, it is essential to confer with a professional medical insurance consultant or institutional risk manager to determine the appropriate type and amount of coverage for your particular practice situation.

It is essential to understand the two basic types of malpractice insurance: "claims-made" and "occurrence." A claims-made policy will only provide coverage if the policy is in effect both when the incident took place and when a lawsuit is filed. As can be seen, this requires that coverage must extend for a significant period of time to provide adequate protection since a considerable amount of time may elapse between when an incident may have occurred and when a claim is made. Because of this, some claims-made policies are written to provide a period of coverage referred to as a "tail" that extends coverage for a set amount of time (such as five years) after a policy end.

If not offered as part of the original policy, tail coverage may also be purchased; the cost of tail insurance is typically a one-time assessment that can be as much as 1.5 to 2 times a typical annual malpractice insurance premium.

Tail coverage, however, is critical in situations where you have been covered with a claims-made policy but are changing insurance carriers, moving to a new position, or are retiring, ensuring continued malpractice coverage during these transition times for incidents that may have occurred in past years.

The costs of tail coverage may be covered by your previous practice to ensure adequate protection of their group assets or by your new practice either as a benefit or an inducement to join the group. Tail coverage may be an appropriate item of negotiation with a prospective new employer.

Occurrence policies differ from claims-made insurance. They cover any claim for an event during the period of coverage, even if the claim itself is filed after the policy lapses. In general, this type of policy does not require tail coverage, although this type of insurance is usually significantly more expensive and less frequently offered by employers.

It is also essential to understand the finer details of your medical malpractice coverage.

Policies typically cover a range of expenses associated with defending and settling malpractice suits, including

• attorney fees,
• court costs,
• arbitration and settlement costs,
• medical damages, and
• punitive and compensatory damages.

Medical malpractice usually does not cover liability that arises from criminal acts or sexual misconduct. It is critical to know what your insurance policy would specifically cover and what it does not ensure you are adequately protected. It is also essential to see the amount of coverage for each occurrence and all claims that may be made against you.

Although some states require minimum amounts of coverage for both the amount per each claim and the total of all of the claims that may be made, it is important to discuss the potential need for additional coverage above these minimums with a professional malpractice insurance consultant or institutional risk manager to ensure that your assets are protected.

If you are entering private practice, remember that in addition to medical liability claims, medical practices also face potential claims associated with other medically-associated risks such as cyber liability and regulatory requirements such as compliance with the Health Insurance Portability and Accountability Act (HIPAA). Some medical malpractice policies may cover these types of exposures; if not, separate policies to protect against these risks are generally available.

Medical Negligence Falls into Three Broad Categories of Error:

• Failure to Diagnose.

This form of malpractice occurs when a doctor fails to diagnose an existing medical condition or diagnoses a medical condition that the patient does not have.

• Negligent Treatment.

In these kinds of cases, the doctor rendered negligent treatment to the patient. In other words, the doctor made a mistake that a reasonably competent doctor would not have made. Proving that medical malpractice occurred in an emergency room is more complicated. For those cases, the injured patient must prove that emergency room personnel were not merely careless but that they were "willful and wanton" in their disregard of the patient's medical needs.

• Failure to Warn.

The last category of medical malpractice is the failure to warn the patient of known risks. Most treatment courses — whether it is surgery, administering drugs, or some other treatment — carry risks. If a doctor fails to obtain the patient's consent to a course of treatment after warning the patient of known risks, then the doctor has committed malpractice if that known risk occurs.

Some cases will have provable negligence from multiple categories. For instance, if a doctor failed to warn about the possibility of prescription drug addiction and subsequently "over-prescribe" a patient, the physician has acted negligently AND failed to warn the patient of potential risks.

According to a 2013 study published in the BMJ Open medical journal, "failure to diagnose" was the largest source of malpractice claims, accounting for 26 to 63 percent of all malpractice claims brought against primary care physicians. Researchers found that the most common patient outcome from "failure to diagnose" errors was death, which occurred 15 to 48 percent of outcomes recorded in malpractice claims.

I hope this helps to understand, creates curiosity, and motivates you to learn and adapt better to this complicated topic and what it entails and how we can all be prepared and ready from day number one to mitigate the exposure and risk of liability carried by our medical proceedings while practicing medicine in the USA.

Thanks for listening, 

Happy holidays 2020!

Alonso Osorio, M.D. FACEP, FAAEM, FAAFP. 

[email protected] 

[email protected] 

[email protected]