Individual APP Policies Can Result in Costly Surprises
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It is very common in most medical practices to have advanced practice providers (APP) such as physician assistants, nurse practitioners, registered nurses, surgical assistants and more listed on the practice’s malpractice insurance. Through this policy, they may either share in the limit of liability or have a separate limit of their own, but some APPs may feel that this is not enough – especially if they’re moonlighting or don’t feel safe with a practice’s lower limits.
“A hot topic at the moment is that qualified nurse practitioners will now be able to independently operate primary care practices without an attending doctor’s supervision under a bill just passed by the legislature,” said Matt Gracey, medical malpractice insurance specialist at Danna-Gracey, the largest independent medical malpractice insurance agency in Florida.
According to the new law, advanced nurse practitioners with at least 3,000 hours of experience under the supervision of a physician can qualify to provide services including family medicine, general pediatrics and general internal medicine. The law does not currently cover other APPs.
“From an insurance angle, many practices are not aware of the repercussions,” he continued. “Most practices that have APPs have them listed on their malpractice insurance as either shared limit of liability or separate limit of liability for each APP. This is good because the coverage is all in one place. The problem comes when an APP decides to go out and purchase their own policy, often without knowledge of the practice.”
According to Gracey, APP insurance most often has a higher limit for a relatively small amount of money. “This is attractive to a lot of APPs, especially if they are concerned about the law that limits what doctors need to carry, or if they’re moonlighting,” he explained. “The coverage that the practice has would most likely not extend to those activities, so buying a separate policy might seem like the right solution.
“We’re finding this happening much more often than anyone realizes, because APPs want more protection than what they have with the doctor,” he added. “It’s a flaw in the design of insurance coverage.”
The drawback is that in a bad claim situation, APPs might find themselves getting a lot more attention than they want.
“In this type of situation, the doctor gets sued along with the practice or corporation, and any provider on the patient chart gets sued, including the APPs,” Gracey explained. “In discovery, if it comes out that the APP has much higher limits than the doctor has, and has a separate policy, the case can get focused on them instead of the doctor or practice, which is never an enviable position to be in.”
If the policies are with different insurance agencies, then the claims representative that the APP’s insurance company appoints starts handling the case, and the doctor’s malpractice company can find itself involved in the defense of the APP provider.
“Unity of defense is a sacred principle that you don’t want to violate, and the claims defense can be considerably weakened in this scenario,” said Gracey. “It’s better to have the same insurance company and the same representation presenting a unified front for the defense.”
Gracey warned that because the APP’s limits of liability can be much higher, it can also result in higher judgements.
“This can also result in ‘finger-pointing’ between defendants, and when you’ve got co-defendants pointing fingers, the outcomes are usually compromised,” he added.
To avoid this type of situation, practices should ask their APPs if they have such policies. “If they do, we recommend getting individual policies or a separate limits policy through the same insurance company that the doctor has,” said Gracey, adding that that can even be less expensive than a policy at another insurer. “Some insurance companies even allow moonlighting as long as the doctor approves it.
“They may not need to have a separate policy, but they do need to discuss this issue with their employer to make sure that they have their coverage properly aligned,” he added.