“The majority of [policies] are in Massachusetts and so are written under an occurrence basis,” says Zorola. “The ones outside of Massachusetts—and those are the group policies that we do have—are claims made.”
Physicians and insurance carriers each have preferences between the two types. “The occurrence policy is the policy that a lot of physicians like because they understand that if they did something today, [they can think] ‘I never have to worry about having insurance in the future for it,’” says Zorola. “The claims-made policy is the one that we as [insurance] companies like because it allows us to close our books on each policy year much sooner because we know that we aren’t going to have any more claims attached to the policy this year or in another year or two.”
Fully Insured or Self Insured?
Malpractice policies available through employers are either fully insured or self insured. The difference between the two types involves who is responsible for the claims payouts. With fully insured plans, the employer pays a premium to an insurer and the insurer pays claims out of the pool of premiums it collects from everyone it insures. Under a self-insured plan, the employer is responsible for paying all claims out of company assets. The Employee Retirement Income Security Act (ERISA) regulates self-insured plans; the plans are then under the jurisdiction of the U.S. Department of Labor.
“The hospitalists that we do [under]write [fully insured policies] for tend to be in the smaller community hospitals, which may not necessarily have the huge need for hospitalists; whereas the larger institutions may have a larger need for hospitalists [and] they usually tend to be self-insured,” says Zorola.
Controlled Risk Insurance Company of Vermont, known as CRICO and located in Cambridge, Mass, is one example of a self-insured system. “We only have one [malpractice insurance] product for a closed system where our clients are the Harvard teaching hospitals” says Karen O’Rourke, senior vice president of CRICO.
Individual Policies for Certain Circumstances
Hospitalists who take out individual policies are usually practicing part-time or moonlighting and have another policy with a carrier that is covering their primary practice. “And this is true across the country,” says Zorola. “Most carriers will have some sort of part-time credit that they will provide [to] the people who come to them for policies. Now there are some carriers, and these are usually the large hospital carriers, who won’t provide individual policies to physicians. They only provide coverage for the hospital and the hospital’s employees.”
Hospitalists who take out their own individual policies usually get coverage from one of the local Physician Insurers Association of America carriers.
Why Are Hospitalists Sued?
In general, hospitalists are infrequently sued for medical malpractice. They may be named in initial claims, but many are dropped before the case is resolved. However, while experts report that lawsuits against hospitalists are scarce, they also reference the lack of classification code specifically created for the hospitalist and his/her duties. Without it, it’s impossible to distinguish in data to learn when and in how many cases hospitalists were named.
O’Rourke says that internists in ambulatory or outpatient practice settings are usually at risk for claims of failure to diagnose—mostly failure to diagnose cancer or myocardial infarctions. In contrast, “the hospitalists’ failures come in the communication area,” she says, “because that’s primarily what they’re there for is to make sure that the patient receives the medical care that they’re supposed to in a hospital setting.”