Let’s Talk Insurance. Beyond Malpractice insurance, what other insurance should I consider?
Every medical provider knows that you have to buy malpractice insurance, and they generally understand why they need it. Another policy that every business has to have is Workers Compensation for their employees. But beyond these two policies, what else should a business consider:
Are you in a capitated contract or thinking about one?
Negotiating capitated contracts is becoming more common with many medical groups these days. With a dizzying array of data points that need to be examined and negotiated with the payors one huge item in the equations of at risk contracts is the reinsurance coverage, and boy is there some gold in this seemingly small line item among all that data!
Florida has long been a hot spot for medical malpractice lawsuits. Professionals debate the causes frequently, but the fact remains: Florida is a place where medicine has to be practiced defensively. And it’s likely to get worse because the Florida Supreme Court recently tossed out the state cap on non-economic damages.
Since the cap was found to be unconstitutional, the risk of expensive med mal suits is expected to rise. And the secondary effect will almost certainly be increased med mal insurance premiums. If the upcoming premium rise is like any from the past (this is a cyclic phenomenon), it’s a sure thing that more physicians will decide to self-insure (not carry professional liability insurance). The State of Florida doesn’t require physicians to carry professional liability insurance provided that they have adequate financial backing or provide necessary patient notices
On June 8, 2017 the Florida Supreme Court, in a 4-3 opinion, ruled that the legislatively-established caps on non-economic damages (such as awards for pain and suffering) in medical malpractice cases are unconstitutional. In 2014 the Florida Supreme Court determined the cap established for wrongful death claims was unconstitutional. The 2017 decision now does away with the remaining caps.
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.
Thursday the Florida Supreme Court ruled that a law capping noneconomic damages (pain-and-suffering damages) at $1 million in medical malpractice personal injury suits is unconstitutional. Medical malpractice insurance premiums will climb fast now that damage award limits are off. If you’re a physician and you haven’t built limits for yourself through asset protection it’s time to get moving.
Florida Supreme Court Ruling on Medical Malpractice Cap
The Florida Supreme Court’s ruling should come as no real surprise since the underlying case has been working through the court system for some time. Initially, the plaintiff was awarded approximately $4 million in non-economic damages by a jury in circuit court. However, the judge applied the Florida law capping non-economic damages and a government-run hospital’s liability cap statutorily set at $100,000. This reduced plaintiff’s award by over $3 million. Although the lower court concluded the plaintiff’s injuries were indeed catastrophic, the law on caps and government limits was in play. The case traveled through the appellate process and on to the Florida Supreme Court.
The Florida Supreme Court’s ruling that non-economic damages caps are unlawful, i.e, unconstitutional under the equal protection clause, is critical for all professionals in healthcare business to take note of. It is fundamental for professionals and entities alike to look at how their businesses are structured so that they can protect assets that likely having nothing to do with a professional’s or an entity’s performance as it relates to patient care.
Evaluating Medical Malpractice Coverage & Asset Protection
It will also be critical to re-evaluate medical malpractice coverage to ensure coverage is adequate. Keep in mind that medical malpractice insurance may pay out the upper end of liability insurance. However, this may not fully satisfy a judgment entered by a court against a healthcare provider, business or entity. Unsatisfied judgments against an individual or entity will remain recorded in the public records until satisfied. Unsatisfied judgments can make it difficult to grow a business or obtain a loan at favorable rates. They can also lead to collection efforts against the individual or entity, such as having liens placed against unprotected assets, garnishment of wages, obtaining charging orders against limited liability companies, and so on.
Assets need to be protected prior to a case being commenced against an individual or entity or prior to the possibility of a complaint being brought. Ideally, physician asset protection planning should be considered at the start of a new career, or early on in a career. Likewise, asset protection planning for entities should be considered when forming the entity or during the planning phases of starting a new venture. Once a medical malpractice suit has been commenced, or there’s reason to know a suit might be brought, asset protection planning options become severely limited. Be prudent – start thinking about asset protection planning before you have problems.
Physician asset protection and licensing a medical device are two areas of the legal field we know very well. Every year, doctor’s around the state are creating new devices, procedures and medications that improve the care of their patients. While ensuring the quality of your creation, the want to make sure that you are protecting your creative properly and ensuring that the quality is not jeopardized either. So how do you protect yourself and your assets? That’s something you need to ask an attorney as they will be able to properly advise you on what to do, what not to do and how to put yourself in the most legally secure position moving forward.
The Florida Healthcare Law Firm has assisted clients with physician asset protection for years and is happy to help you with any questions you have. As you begin to look at your options online, be sure to contact us for facts, not speculation. Online resources are helpful but you should never rely on them as your main source of information. Our experienced team will guide you to the proper decisions to ensure you get the best service possible and are able to properly protect your assets.
Should you consider asset protection planning as part of your estate planning? The short answer to this question is yes if you have significant assets, will inherit sizable assets, or work in a profession that is routinely sued pursuant to medical malpractice complaints. In particular, healthcare professionals should go the extra mile when it comes to asset protection in light of the McCall and Kalitan cases out of the Florida Supreme Court and Fourth District Court of Appeals, respectively, invalidating the limit on non-economic damages in medical malpractice cases. So how can asset protection be accomplished?
Protecting your assets and preserving wealth can be accomplished through a variety of planning techniques. These techniques are used to protect assets from being wasted or levied against in a medical malpractice suit. Asset protection planning is part of estate planning, which should be reviewed whenever an individual has a significant change in life circumstances, becomes aware he or she will inherit a sizable investment or asset, or enters a profession that is considered to carry considerable risk.
The intent of asset protection is to protect assets from waste or exposure to potential creditors, without concealment or tax evasion. Asset protection can preserve wealth for use later in life or to be passed on to descendants, that is, children or grandchildren, or perhaps other family members.
Asset protection can be maximized through various vehicles such as:
EMTALA (the Emergency Medical Treatment and Active Labor Act) was passed by Congress in 1986. The purpose behind the law was to ease the burden of public or so called charity hospitals from having to treat indigent patients because other hospitals refused to treat such patients due to their inability to pay. EMTALA is a non-discrimination law rather than a law establishing standards of care. The scope of the law is very limited. A hospital’s obligation is to (1) provide an appropriate screening to determine whether an emergency condition exits and (2) if there is an emergency condition the facility cannot transfer a patient until the patient is stabilized or if other conditions of law are met.
A physician’s obligation under EMTALA essentially compels a physician who is on call to go to the hospital’s emergency department and to examine and treat a patient as necessary to satisfy the hospital’s screen and stabilize duty. Contrary to what some hospitals claim (and what some medical staffs decide), there is no obligation under EMTALA to see or treat a patient in a physician’s office. A positive or negative outcome has no bearing on the issue of EMTALA compliance. The futility of providing treatment to screen and stabilize is no defense to an EMTALA violation claim. Physicians who fail to comply with EMTALA can expect an investigation from the Office of Inspector General (OIG) of HHS and can face a civil monetary penalty of up to $50,000. Physicians who are found not to comply with EMTALA often face regulatory action (licensing board) and medical malpractice suits.
Medical Screening Examination (MSE) Requirement
42 USC §1395dd (a) requires a hospital to provide for an appropriate screening examination within the capability of the hospital’s emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition exists. The law proscribes the basic elements of an appropriate MSE, but does not go so far as to dictate the clinical particulars that must be implemented.
Stabilizing Treatment Requirement
Subsection (b) provides in pertinent part:
…the hospital must provide either –
(A) within the staff and facilities available at the hospital, such further medical examination and such treatment as may be required to stabilize the medical condition, or
(B) for transfer of the individual to another medical facility in accordance with subsection (c).
Under subsection (c) a patient who has not been stabilized may be transferred only if the individual (or his/her representative) understands the risk involved with the transfer and requests in writing transfer to another medical facility and a physician has a signed certification that based on the information available at the time of the transfer, the medical benefits reasonably expected from the provision of appropriate medical treatment at another facility outweigh the increased risks to the individual…
The terms “to stabilize” and “stabilized” are defined in Subsection (e), but are subjective or situational in nature. The definition depends on the risks associated with the transfer and requires the transferring physician faced with an emergency to make a fast on-the-spot risk analysis. Federal Appeals courts have supported the position that “stabilize” for the purposes of transfer is a relative concept that depends on the situation.
Under subsection (c) of the law, a patient who has not been stabilized cannot be transferred unless there is a signed certification based on the information available at the time of transfer, the medical benefits reasonably outweigh the risk to the individual from effecting the transfer and only if the receiving facility has agreed to accept transfer of the individual and to provide appropriate medical treatment. Only unstable patients require a certification and consent of the receiving hospital. A patient who has been stabilized in the emergency room of the transferring hospital may be transferred to a receiving hospital without a certification and without an express written agreement of the receiving hospital. Stabilized patients may be transferred without any such limitation.
Medical staffs must be completely aware of EMTALA’s provisions to (1) ensure their members comply, and (2) have meaningful dialogue with hospital administrations, whose business objectives may conflict to some extent with those of the medical staff members. Physicians who are accused of EMTALA violations, either at the medical staff level, or as a result of an OIG investigation, need prompt and thorough guidance.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.