By Stuart E. Hoffman, DC, FICA
The ugly reality of malpractice, its defense costs, disruption to your practice and the possibly of a large-scale payout are key reasons why you need to regularly look at your professional liability coverage to make sure it meets your real needs and offers you appropriate coverage. This is one point in your practice plan on which you need to be absolutely confident. You need to know what coverage you have and that you are content that your coverage is adequate.
First and foremost, have adequate coverage from a reputable, established carrier. Do not think that you will defy the odds because you are a great or extra-careful practitioner. Malpractice claims are far too random and idiosyncratic to make any kind of prediction about your “chances.”
The doctor of chiropractic without malpractice coverage, and there are thousands in the US, faces not only the exposure of defending any and all claims and possible damage awards, they will be obliged to front ALL defense costs, whether they win or lose. I have spoken to hundreds of DCs who sign up for ChiroSecure coverage out of a sense of obligation to their practice and their patients, and almost without exception, concern over financial exposure is a central issue. These are wise doctors.
According to a May 2005 Kaiser Foundation Report, defense costs to the malpractice insurer or defendant (legal fees, expert-witness costs, other handling fees) have been rising as well. In 1991, defense costs were approximately $15,000 per physician claim. In 2001, those costs averaged approximately $29,500. Defense costs for paid claims more than doubled from $21,000 in 1991 to almost $44,000 in 2001, while defense costs for claims with no payment (61 percent of all claims) nearly doubled from $12,000 to $23,500.
The basic data on the costs of defending malpractice claims deals only with the expenses of legal, expert witness and other out-of-pocket expenditures, not the time and energy of the doctor being defended. For the doctor without coverage, add an additional and very significant sum, because the uninsured doctor must coordinate all of these activities on their own time and at their own expense. For the doctor of chiropractic, time is money, not to mention the emotional drain organizing one’s own defense adds to the non-economic costs. Do not foolishly assume that reality will pass you by.
For those wise DCs who have coverage, here are some key points that you should follow, today!
- Know your limits and the terms of your coverage and regularly review them to make sure you are keeping up with the times. A decade or two ago a million dollars was al the money in the world. Today, we have colleagues with bigger limits on their personal credit cards. As well, malpractice carriers know the trends and listen carefully to their advice as to what is in your best interests. Remember, what may seem like a bargain may not look like such a deal when that lower limit runs out and you are left to personally pay the extra fees or settlements.
- Know if your defense costs are inside or outside your policy limits. According to legal expert Brian S. Kern, Esq, “When defense costs are inside the limit, money spent on defending your case (eg, legal fees, expert witness fees, court costs, etc) directly reduces the amount of money available to either settle a case or pay a judgment. For example, if your liability coverage limit is $1 million, and your legal fees, witness fees, and court costs add up to $200,000, you can’t settle the case for more than $800,000 — unless you pay the remainder out of your own pocket.”
- Know your carrier and be sure they are stable, recognized, highly rated and here to stay. The insurance industry rates carriers through AM Best, and like your grades in high school, A+ is the best. Also, do some checking and make sure you know exactly who you are dealing with and who actually provides your coverage. Many agents and marketing firms are in the marketplace selling coverage on behalf of various providers. Do not assume anything; check.
- Always have your written malpractice insurance policy in a secure, immediately accessible location. It is not a bad idea to provide a copy to your attorney and to make sure your key staff member or members know where that document is. You should also be fully familiar with the procedures you are to follow if there is a potential or pending claim; including any possibly incident that might escalate into a claim.
- Never hesitate to contact your carrier to ask about any problematic situation. They should be immediately available and happy to assist you, especially if it helps both you and the carrier avoid any escalation into an actual claim. If your carrier is not responsive or is difficult to reach, start looking for better coverage since here the old saying that an ounce of prevention is worth a pound of cure is really true, except you are talking about potentially saving thousands of dollars and endless headaches.
- Know the exact terms under which any claim will be settled and your personal role in making that decision. In too many cases, DCs have opted for coverage under which they do not have the final say in settlement determinations. Carriers have a matrix by which they evaluate defense expenses versus settlement options and can and frequently do settle frivolous claims, often over the objections of the doctor on whose record that settlement goes, just because it is in their economic interests to do so.
Trends in malpractice continue to keep all health professions under serious pressure, and despite state efforts at limiting attorney’s fees, caps on damage awards, placing tighter limits on the timeframe for filing malpractice claims and other “tort reform” provisions, malpractice exposure is still the doctor of chiropractic’s greatest liability risk. This pressure is only going to expand with greater consumer access to health care and legal information through the Internet, growing consumer activism and a hungry legal profession willing to take on any claim, no matter how flimsy.
The chiropractic profession has the advantage of being one of the safest and most effective forms of health care, but we continue to be caught up in the greater malpractice environment in which the medical profession is very much on the defensive. This environment is stimulating a new wave of legal and consumer initiatives, with a “right to safety” becoming a new topic in public policy discussions on health care. Activist consumer groups and attorneys are seeking to establish “judicial recognition” of a patient’s right to safety as a new element in the litigation mix. The aim of these activists is to seek to use this new “right” to stimulate greater caution and more effective injury prevention in hospitals and ultimately on the part of individual doctors. Because this sounds like a worthy cause, many politicians will likely be mobilized to promote it, and we will certainly hear more about these issues in the coming months. This is an environment in which you must have solid liability coverage.
Finally, I urge all DCs to shop wisely, looking not just at price but at the details of coverage including the points outlined above. It is vitally important to remember that there is no way to play catch up with malpractice coverage if you all of a sudden are facing a claim. Either you have coverage or you don’t. ChiroSecure’s success rate in defending our policy holders is impressive and I am proud of the job we do for our doctors. We offer proven coverage at responsible rates, top-notch service and an aggressive intervention and prevention strategy. And, peace of mind comes with every policy, and there is no way you can put a price tag on that.
Stuart E. Hoffman, DC, FICA, is the president of ChiroSecure, the only malpractice insurance program endorsed and approved by the International Chiropractors Association. Dr. Hoffman is a highly experienced doctor of chiropractic and licensed insurance broker who knows the intricate details of daily practice and who can give you the best advice based on his unique knowledge of both the insurance world and the world of chiropractic. To find out how you can get liability protection at the best rates call Dr. Hoffman at 1-866-802-4476 or visit www.chirosecure.com.