How the COVID-19 Crisis is Affecting Malpractice Insurance

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The spread of the coronavirus has affected every aspect of healthcare, and that includes malpractice insurance. While some physicians are on the front lines, others are experiencing a slowdown in business – and both have concerns.

“We are seeing a lot of activity from clients who have questions about what to do during this time,” said Matt Gracey, medical malpractice insurance specialist at Danna-Gracey, the largest independent medical malpractice insurance agency in Florida. “What’s interesting is that doctors seem to be in two camps – they are either busier than ever, or not busy at all.

“Those who are very busy are concerned about making sure that their malpractice insurance covers a number of services, including telehealth,” he said. “While it does, physicians need to let their insurers know that they are providing telehealth services, and make sure that they’re following state guidelines.”

According to Gracey, each state has different telehealth rules, and while some states have loosened restrictions on telemedicine during this time, other states haven’t.

For example, a doctor might treat patients in Florida, but then a patient travels out of state, perhaps to a second home, and calls in for a telemedicine visit,” explained Gracey. “Physicians need to be very careful about licensure issues in this situation.”Gracey says that doctors are also pushing to be exempt from liability for coronavirus issues, and in fact, the American Medical Association (AMA) and the Florida Medical Association (FMA), as well as a number of other societies and medical organizations, have petitioned the state and federal government for immunity for liability from coronavirus patients.

In February, U.S. Health & Human Services Secretary Alex Azar did extend liability protection to a wide range of healthcare providers, suppliers, drug makers and other entities, making them immune from any claim related to the manufacture, distribution, administration, or use of medical countermeasures, except for claims involving willful misconduct.

Can Premiums be Reduced?

According to Gracey, many clients have been asking about decreased premiums since the volume of patients has dropped so dramatically. “Well patients aren’t coming out of their homes, and elective surgeries have stopped,” said Gracey. “Doctors who are not on the front lines may not be busy at all; in fact, we’re even seeing physicians suspending their practices until this is over.”

While some companies are giving premium adjustments for downtime because the risk is less, and others are allowing payment deferrals from 30 to 120 days, other companies are holding the line.

“From the insurance companies’ viewpoint, actuarily they have a hard time giving too much credit on premiums because claims-made policies have a retroactive coverage component that most often goes back to the beginning of a physician’s practice, or the physician being hired into a new group,” said Gracey. “Under the Florida statute of limitations, the statute of repose extends the liability window to the end of four years, except for children; then it goes until the child’s eighth birthday.

“Even if a physician is not practicing full-time for two or three months, their exposure is still covered for any past procedures,” he added.

Gracey noted that as the economy shifts, doctors may need more protection than ever.

Studies show that during a recession, people sue doctors more often, so we counsel them that they may actually need more coverage and higher limits,” he said.

Not only do those on the front line need to be concerned about the liability of treating COVID patients themselves, but there may also be indirect claims resulting from other patients experiencing a delay of diagnosis, or the delay of essential surgeries that were deemed as non-essential,” he added.

There are a lot of things that can go wrong when a healthcare system is put under this amount of stress, and I believe that we’ll see many more lawsuits as a result of the crisis.”