By: Jeff Cohen
As expected for some time, Florida’s limits on non-economic damages has been ruled unconstitutional by the Florida Supreme Court. This event will likely drive medical malpractice premiums up and have healthcare providers reexamining (a) whether it makes more sense to “go bare” (without liability coverage), and also (b) their corporate structure to minimize exposure to professional liability claims.
Asset protection strategies are not new, but they tend to especially rise and fall with the cost of medical malpractice coverage. When the cost of med mal insurance coverage rises, healthcare providers of all kinds wonder whether it makes more sense to both go bare and also structure their organizations in ways that reduce exposure to med mal claims.
Corporate Structure for Asset Protection
The principal ways healthcare businesses use structure to reduce med mal exposure is through various healthcare corporate entities. Limited liability companies and holding company models are especially attractive to healthcare providers.
Another way for healthcare providers to reduce their med mal risk is to augment their regulatory compliance policies, which can have the effect of not only reducing regulatory risk, but also enhancing their clinical practices and best practice documentation. Florida healthcare providers have to be very careful, however, given some of the deficiencies of state law, such as the provision that that can result in liability to single member (owner) limited liability companies. Owners of Florida limited liability companies that don’t have two or more owners need to take a step back and consider their corporate structure.
In the face of the court’s ruling, healthcare providers are forced to anticipate increased med mal risk and to plan for it with effective and proven asset protection strategies and corporate structure plans.