Medical Professional Liability 101

February 19th, 2013

By Rebecca Owen
Texas Medical Liability Trust

I recently had the opportunity to speak to some residents at a convention. I was only given 15 minutes to go over medical professional liability insurance (aka med mal insurance) so I thought of the three most important topics that physicians usually ask me regarding their coverage and practice.

One of the questions I get asked all the time is “What limits should I purchase?” The first thing you should check is your contracts. If you have a contract with a hospital, another insurance company (e.g. Medicare), or a group you are working with, you need to verify if they have a minimum limit requirement. Also, tort reform in Texas does not mean that doctors only need a limit of $200,000/$600,000. Physicians need to understand that the $250,000 cap only refers to pain and suffering. Any economic damages awarded to a claimant could go into the millions.

If contracts and tort reform were not a concern, I would then refer you to a lawyer or a CPA. The limit of liability you have on the policy is the most an insurance company will pay for a claim. If you are required to pay over those limits, then your assets will be at stake. Lawyers and CPAs can determine how to protect those assets.

The second topic I discuss with physicians is the Texas Medical Board (TMB). The TMB was created to protect Texas patients. If a patient files a complaint against a physician, the TMB is required to follow up for additional information. The envelope sent by the TMB looks like a normal piece of mail, and you may not even notice it. However, inside is a letter requiring you to respond to the complaint within 28 days. This is when I tell physicians to get a lawyer.

Most insurance companies include additional coverage in the policy that pays for the legal expenses of hiring a lawyer in these situations. Some companies may even cover fines and penalties associated with the complaint. The most important thing to remember is not to respond to the letter yourself. Contact your insurance company or agent and ask them to find you a lawyer if you don’t have one.

The final topic that I discuss a lot: discounts. Most insurance companies offer discounts to physicians who have a low claim history, are new to practice, or participate in CME activities. Ask your insurance company or agent what discounts are available to you.

You can also save money by considering what procedures you offer in your practice. If you make a change in your practice or have stopped doing a certain procedure, you should ask if it would affect your premium. For example, if you stop delivering babies and only plan to do in office gynecology, then inform your insurance company of this change. In addition, any time you go on a leave of absence for a medical purpose, military service, or sabbatical ask if there is a discount in premium. This goes especially for physicians who take family medical leave.

Overall, look at what you are doing in your practice. Review contracts with other institutions to determine what is required of you, and always call your insurance company or agent to determine if any savings are available. You may be throwing money out the window.

If you have any other questions about medical professional liability insurance, please post them in the comments section. Or you may contact Rebecca Owen at rebecca-owen@tmlt.org.

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