Tag Archives: malpractice insurance

PRI Launches New Admitted MPL Insurer EmPRO in New York

Physicians’ Reciprocal Insurers (PRI) launched EmPRO Insurance Co., a new subsidiary insurer domiciled and authorized to write medical professional liability business in the State of New York, on September 15.

Wholly-owned by PRI, EmPRO is administered by PRIMMA LLC, PRI’s attorney-in-fact. Current PRI insureds will be transitioned to EmPRO when their policies renew without any interruption in coverage, and all new policies will be written through EmPRO.

When PRIMMA took over as attorney-in-fact for PRI on July 1, 2017, the insurer had a negative $341 million surplus. Since that date, PRI has posted an overall surplus improvement of more than $256 million to negative $84.8 million at the end of the second-quarter 2020.

“We’ve seen a continued, quarter-by-quarter surplus improvement driven by a renewed focus on underwriting, which has dropped our loss ratio from the mid-80s to the mid-60s, across all lines,” said Bruce Shulan, PRI vice chairman, president and chief executive officer. “Despite that improvement, reaching new business has been difficult due to the anti-competitive effect of PRI’s insolvency.

“Notwithstanding the protection from state legislation, our insolvency continued to be a barrier. We set out to address that with a plan to set up a subsidiary to PRI, a solvent stock insurance subsidiary, and move PRI’s business into the stock insurance subsidiary so that when we’re selling new business, new policies, we would no longer be under that taint of insolvency.”

In executing that plan, PRI acquired Empire Insurance Co. via a shell company transaction, renamed and rebranded it, and infused the new entity with $100 million of its approximately $900 million in assets.

“EmPRO, on a standalone basis, has $100 million of surplus, wholly-owned by PRI,” said Brian Nolan, PRI executive vice president. “The infusion is reflected on the PRI balance sheet as a $100 million investment in a subsidiary. While PRI may be insolvent, we maintained enough liquidity in our balance sheet for the EmPRO transaction.”

As its attorney-in-fact, PRIMMA will run-off all PRI legacy claims as well as manage the EmPRO business. EmPRO profits will be ceded to PRI until it reaches solvency. PRI will still exist, and all EmPRO policyholders will be subscribers of the PRI insurance reciprocal.

“Any suggestion we’re trying to favor EmPRO to the detriment of PRI is absolutely incorrect,” Shulan said. “This is PRI putting up the capital, and this is PRI absolutely getting the benefit of EmPRO. And because the business mix, operations, technology and people are all the same, the only real difference between PRI and EmPRO is the ability to issue a policy out of a solvent company rather than an insolvent one.”

According to PRI, the move has already attracted the attention of the New York medical professional liability community.

“We’ve received a number of calls from brokers we haven’t worked with in the past,” Nolan said. “They’re trying to get a sense of what we’re all about on a go-forward basis. Naturally, moving from an insolvent company to a solvent one makes it much easier for brokers to market and sell our products.”

“The market is going to notice the solvency, not necessarily where we came from,” added Shulan. “But our view is that where we came from is an important part of the story. It’s been very exciting, and frankly, very unique. I dare say that nobody can point to another insurance company in the United States that started out in the position we were in when we took over at PRI and has traveled this kind of distance at this kind of speed.”

This article was written by Michael Matray, the Editor of Medical Liability Monitor.

If you are looking to get a quote from PRI/EmPRO and the other major medical malpractice insurance carriers in New York, click here.

The Doctors Company: COVID-19 FAQ

Last updated 3/26/2020

We know how busy everyone is during the Covid-19 pandemic, and we want you to know that we are making all information available to our clients as soon as we receive it. Please bookmark or periodically check this page to receive any updated information regarding how The Doctors Company is handling this for anyone insured through them. Please call us at 1-800-962-1224 if you have any questions or concerns.

Coverage for retired doctors returning to volunteer

We are pleased to extend medical professional liability coverage to retired members coming back to volunteer to provide care during the COVID-19 pandemic. We appreciate the critical work you are doing.

  1. What is meant by volunteer services?
    • We define volunteer as a retired healthcare professional providing professional services for no fee, salary, or other compensation—with the exception of expenses incurred delivering those services.
  2. What are the coverage limits of liability?
    • $1 million per claim, up to $3 million aggregate.
  3. Are defense costs covered?
    • Yes. If a claim is filed against you, defense costs are paid in addition to the limits of liability.
  4. Are regulatory actions also covered?
    • Yes. Regulatory defense coverage is provided for actions resulting from volunteer professional services—up to $50,000 with no deductible.
  5. What is the premium charge?
    • The premium charge is waived and provided to you at no cost.
  6. How do I activate my coverage?
    • Call us at 1-800-962-1224
  7. Does this mean that my prior policy will be reactivated?
    • No, your decision to volunteer and accept this benefit of your membership has no impact on your prior policy. To expedite the delivery of this benefit during the pandemic, we are providing this coverage through a “master policy” issued by The Doctors Company Risk Retention Group.

Telemedicine Coverage

  1. Will my coverage remain in force if I provide more telemedicine visits?
    • Yes. Telemedicine is included in your policy. However, members need to comply with state licensure laws for not only where they are physically located, but where the patient is located as well. The Doctors Company will follow any license expansion provided by state and federal governments.

Coverage for retired doctors returning to practice

  1. Will my policy provide coverage if we rehire retired or inactive doctors, advanced practice providers, and staff in response to the COVID-19 pandemic?
    • Yes. However, please reach out to us to ensure coverage is in place: 1-800-962-1224

Suspending, relocating, or reducing your practice

  1. Will you allow suspension of coverage if my practice closes due to COVID-19 concerns?
    • Yes. We will suspend coverage on your policy, which also suspends premium. Please contact us right away, so we can help you: 1-800-962-1224
  2. Will my coverage remain in force if I am temporarily practicing from a different physical location?
    • Yes. Please see the answer with the information about license expansion. You don’t need to notify us about these temporary changes.
  3. Will my coverage remain in force if I am temporarily practicing in a new state in which I am authorized or licensed to practice in response to the COVID-19 pandemic?
    • Yes. However, you should call us immediately to ensure coverage in in place, especially in situations involving Patient Compensation Fund states: 1-800-962-1224
  4. If I am limiting or reducing my surgeries, can I also expect a reduction in premium?
    • Please reach out to us to discuss your specific situation: 1-800-962-1224
  5. Am I covered if I continue with my practice despite recommendations to suspend some or all of my practice?
    • Yes. We will rely on your professional judgment relative to your practice.
  6. Will my coverage remain in force if I am temporarily practicing from a different physical location?
    • Yes. Please see the answer with the information about license expansion. You don’t need to notify us about these temporary changes.

Premium Payments

  1. What if my premium or deductible payments are impacted?
    • Policy cancellation and premium installment due dates will be adjusted if your practice has been disrupted by COVID-19—to ensure there is no break in coverage if you are unable to make payments due to impacts of the emergency. Please call us immediately to discuss your situation: 1-800-962-1224

COVID-19 patient claims

  1. Am I covered for patient claims involving COVID-19?
    • We understand that our members have concerns regarding insurance coverage for COVID-19 related claims. Generally, our policy protects the practice of medicine and subject to its terms and conditions, if a patient asserts a claim against our member involving COVID-19, we would anticipate that claim to be covered. However, because insurance coverage is determined by the specific facts of a claim, we are unable to provide answers regarding insurance coverage until a claim is actually made against a member and reported to The Doctors Company. Please call us if you have any additional questions: 1-800-962-1224

Coverage for practice outside specialty or scope

  1. Will my coverage remain in force if I am asked to temporarily provide care outside my specialty or scope of practice in response to the COVID-19 pandemic?
    • Please contact us as soon as possible to obtain approval for these temporary changes: 1-800-962-1224
  2. If my nurse or other non-physician healthcare professional offers services outside our practice insured by The Doctors Company, will they continue to be covered under our policy?
    • Yes, coverage will apply if they are still acting under the scope and direction of an insured physician within your practice; otherwise, they should seek coverage from the facility or practice for which they are offering services.

Business interruption coverage

  1. Do you provide business interruption or crisis management coverage for losses incurred from COVID-19?
    1. No. The Doctors Company medical professional liability policy does not provide business interruption or crisis management coverage. Please contact us if you have any questions: 1-800-962-1224
Utah State Flag

Utah Supreme Court Strikes Down Portion of State’s Medical Malpractice Pre-Litigation Review Panel Process

The Utah Supreme Court last month declared a portion of the state’s pre-litigation medical malpractice review panel process under the Utah Health Care Malpractice Act unconstitutional because it violates the separation of powers doctrine.

The Utah Legislature passed the Health Care Malpractice Act in 1976 to curb the perceived cost increases in malpractice insurance in Utah. The legislature added a pre-litigation medical review panel to the Act’s requirements in 1985.

Prelitigation review panels in alleged medical liability cases against healthcare providers were required under Title 78B, Chapter 3, Part 4, of the Utah Code Annotated. The administrative rules applicable to prelitigation review panels are found in Section R156-78B of the Utah Administrative Code.

The prelitigation panel review process is overseen by the Utah Division of Occupational & Professional Licensing (DOPL) and required the plaintiff initiating a medical professional liability action to file a request for panel review within 60 days after filing a notice of intent to commence action. This request is mailed to all healthcare providers named in the notice and request. Filing a request for a pre-litigation panel review also starts tolling the statute of limitations. A three-member panel comprised of an attorney who serves as chairperson, a lay member who is not a healthcare provider, hospital employee or attorney and a licensed healthcare provider practicing in the specialty in which the respondent healthcare provider practices are tasked with reviewing the merits of the case.

A meritorious finding by the panel results in a certificate of compliance with the prelitigation requirements, and the claim may be filed with the courts. If a claim was determined to be non-meritorious, prior to 2010, the claimant was required to first obtain an expert affidavit in support of the claim before filing a lawsuit.

In 2010, the Utah Legislature amended the prelitigation panel review process so that the DOPL could reject the plaintiff’s expert affidavit and block the lawsuit from moving forward. This is where the Utah Supreme Court found constitutional flaw.

The Court’s Ruling

In the case of Vega v. Jordan Valley Medical Center, Yolanda Vega attempted to file a medical professional liability lawsuit against Jordan Valley Medical Center on behalf of her deceased husband. The DOPL determined her claim lacked merit. She then acquired an expert affidavit in support of the claim, which the Division determined was inadequate. Vega filed her lawsuit anyway, and it was dismissed for lack of approval by the DOPL. Vega appealed the dismissal, arguing the Utah Health Care Act’s prelitigation requirements violated the separation of powers doctrine of the Utah Constitution. The Utah Supreme Court agreed with Vega’s argument.

“We conclude that Utah Code section 78B3-412(1)(b), which requires a certificate of compliance from DOPL in order for a plaintiff, like Ms. Vega, to initiate a malpractice action against a healthcare provider, is unconstitutional,” the Justices wrote in their opinion. “Accordingly, those sections of the Malpractice Act that require a plaintiff to obtain a certificate of compliance prior to filing a lawsuit in the district court must be stricken from the Act. Additionally, we declare the language in Utah Code section 78B-3-423(7), which mandates a dismissal of any malpractice action filed without a certificate of compliance, to be unconstitutional. Because section 423 cannot standalone or serve a purpose without section 423(7), we find the entirety of section 423 and all language throughout the act that refers to affidavits of merit to be unconstitutional.”

The reasoning behind the decision rests on two distinct constitutional provisions: the separation of powers ensconced in Article V of the Utah Constitution and the judicial power vested in Article VII. Under both articles, the DOPL was determined to be infringing on the purview of the judiciary.

“While Article V regulates and guides the apportionment of authority and function between the branches of government, the core judicial power vested in the courts by Article VIII is always retained by the judiciary — regardless of whether the party attempting to exercise a core judicial function belongs to another that the “explicit vesting of jurisdiction in the various courts of the state is an implicit prohibition against any attempt to vest such jurisdiction elsewhere,” the Justices wrote. “Additionally, the ‘[c]ore functions or powers of the various branches of government are clearly nondelegable under the Utah Constitution.’  Notably, the core judicial function of courts includes ‘the power to hear and determine controversies between adverse parties and questions in litigation.’”

Ultimately, the Utah Supreme Court determined that “allowing DOPL to exercise the core judicial function of ordering the final disposition of claims, like those brought by Ms. Vega, without judicial review” interferes with that which is the sole purview of the courts. Thusly, the high court struck down the 2010 portion of the law that outlined the process of a healthcare provider offering an affidavit that is then sent to DOPL. The original DOPL pre-litigation hearing process remains intact.

2019 MPL Association Conference to Convene in Portland, Oregon, May 15-17

The MPL Association, the organization representing the medical professional liability (MPL) insurance community, issued a reminder that its annual Conference will take place May 15-17 at the Marriott Portland Waterfront Hotel in Portland, Ore. The Conference is open to both MPL Association members and non-members. The Association also noted that advance registration for the 2019 MPL Association Conference will expire on April 12. Attendees who register before April 12 can save $100.

“This event convenes hundreds of professionals who work in insurance and alternative risk transfer, all looking to gain new insights on the global and day-to-day issues facing medical liability companies, risk retention groups, captives, trusts and other entities,” said Brian K. Atchinson, president and CEO of the MPL Association. “We have secured high-profile speakers and panels with decades of experience in medical professional liability. No matter what your role in the industry, we believe that you will learn some surprising perspectives by attending this conference. This unique event will help attendees find pragmatic solutions for optimizing performance in these changing and challenging times.”

The keynote speaker for the Conference this year is Kevin M. Kennedy, principal, ECG Management Consultants, who will explore disruptive forces in healthcare. Kennedy will share his perspective on what these changes might mean, lessons from other industries and how physicians as well as hospitals should respond. His discussion lays the foundation needed to answer a critical question for MPL professionals: How do these changes impact MPL insurers? This question, and more, will be explored in a follow-up panel discussion featuring Kennedy and several MPL executives. These two thought-provoking sessions will produce critical insights about healthcare and the ever-evolving environment for MPL insurers.

Chad C. Karls, FCAS, MAAA, principal and consulting actuary, Milliman Inc., will brief attendees on the industry’s historic and current financial results, offering insight into the major drivers of those results. In addition, he will provide perspective on the profitability of the business and the financial strength of writers of MPL coverage.

“This session will offer attendees a fuller understanding of the underlying drivers of the industry’s financial condition,” Atchinson said. “If you are interested in the performance of the MPL industry, these are the particular metrics that are important to watch closely.”

Wendy Chung, MD, Kennedy Family Professor of Pediatrics and Medicine at Columbia University, will discuss the MPL implications of precision medicine. With genetic and personalized therapies becoming more widely available, the average physician may be overwhelmed and challenged by the expectations of an ever-expanding knowledge base. Chung will help insurers understand and prepare for the necessary clinician and patient education, best practices and protocols to deal with potential exposures related to precision medicine.

There will be a panel discussion on the lessons learned from high-profile, catastrophic MPL cases. The expert panel will explore the impact of high-profile cases and the ramifications of such cases for MPL carriers, offering examples that illustrate the consequences of these cases. In addition, panelists will deconstruct the key elements in these lawsuits, from their individual perspective, and offer suggestions for minimizing exposure from such cases in the future.

Other topics to be explored during the two-day event will be the changing face of MPL claims, including new tactics that serve to inflate the potential value of a claim through higher life-care expense payouts; enterprise risk management and the tools that drive performance and mitigate risk; an interactive session on healthcare quality ratings and how they impact the MPL industry; and much more.

The MPL Association is well known for its comprehensive collection of MPL insurance, patient safety and risk management as well as other healthcare-related information and its ability to provide valuable services to a broad diversity of entities, Atchinson said.

By attending this one Conference, individuals who work in the MPL field gain an unparalleled intelligence on the essential developments for 2019 and a clear vision of the road ahead, and as at every MPL Association Conference, unique opportunities for one-on-one networking with their peers, Atchinson further said.

For more information about the 2019 MPL Association Conference, or to register online, visit www.MPLassociation.org.

This conference information is brought to you by Cunningham Group, the medical malpractice insurance specialists.

President-Elect Trump

Special Report: The Future of the Medical Professional Liability Industry and the PPACA under a Trump Administration

The Future of the Medical Professional Liability, Patient Protection & Affordable Care Act Under a Trump Administration

Having weathered two Supreme Court challenges and more than 60 repeal attempts by a GOP-controlled Congress, it was the 2016 election that ultimately handed the Republican Party the ammunition it needs to neuter the Patient Protection & Affordable Care Act of 2010.

With a President-elect who campaigned on a full repeal and replacement of the Affordable Care Act as well as Republicans in control of both houses of Congress, it’s safe to say that President Obama’s signature health law — if not fully repealed — will undergo significant changes.

Despite the unified Republican government, Democrats in the Senate are likely to filibuster any wholesale attempt at repealing the landmark legislation that brought 22 million Americans healthcare coverage for the first time, leaving Republicans the parliamentary procedure known as reconciliation to hamstring the law often pejoratively referred to as Obamacare. The reconciliation process is restricted to matters that relate to spending, require only a majority vote and would allow Republicans to repeal the individual mandate that all Americans purchase health insurance, take apart the Affordable Care Act’s expansion of Medicaid and rescind the premium tax credits for low- and middle-income individuals purchasing health insurance on the open market.

The Republican Congress moved a reconciliation bill that would have repealed those portions of the Affordable Care Act to President Obama’s desk where it was promptly vetoed in December of last year, and the rhetoric so far suggests they are likely to use that bill — or one very similar — to financially hobble the healthcare law early in the Trump presidency.

The replacement portion of “repeal and replace” will likely take much longer as Republicans try to coalesce around legislation that its members can support and doesn’t result in the politically untenable position of abruptly throwing the newly insured out of healthcare access. Add to that the fact that many of the Affordable Care Act’s regulations have woven themselves into the healthcare delivery system during the last six years, and any quick, complete replacement of the Affordable Care Act is unlikely.

How Will Medical Liability Be Affected?

President-elect Trump has been mute so far on what role medical liability tort reform might play in his vision for the American healthcare delivery system, but Speaker of the House Paul Ryan released a 37-page white paper in June of this year where he broadly outlined his goals for replacing the Affordable Care Act.

Ryan’s white paper makes several calls for federal-level medical liability tort reforms. It argues the United States’ current system for medical malpractice remedy has “imperiled patient access and imposed tremendous costs on our nation. The current system has forced doctors out of practicing in certain specialties; it has caused trauma centers to close; and it has forced pregnant women to drive hours to find an obstetrician. The current system also has imposed a tremendous burden in unnecessary costs on our national healthcare system and federal government. Estimates are that the failure to enact meaningful medical liability reform costs our nation’s healthcare system as much as $300 billion each year.”

In its plea for tort reform, Ryan’s white paper argues “comprehensive medical liability reform that includes caps on noneconomic damages will improve patients’ access to quality care while reducing the overall cost of healthcare in America. Our plan will include liability reform that includes caps on noneconomic damage awards.”

The white paper further promises to “work with the states to pursue a wide variety of options such as loser-pays, proportional liability, the collateral source rule, consideration of the statute of limitation, safe harbor provisions, health courts and independent pre-discovery medical review panels.”

If President-elect Trump were a typical Republican, one could assume he holds views similar to Ryan, but the mercurial populist and serial-filer-of-lawsuits Trump campaigned on sticking up for the “little guy” and never officially disclosed his views on tort reform.

“One of the big questions is where the Trump Administration will be on tort reform,” said Mike Stinson, vice president of governmental relations and public policy for PIAA, the insurance industry trade association that represents entities doing business in the medical professional liability arena. “We’re not 100-percent sure we have a pro-business President-elect who is also going to be pro-tort reform. We usually link those two ideas together, but he could go in directions that would normally seem contradictory.”

Add to that the Freedom Caucus — comprised of conservative, libertarian-leaning Republican members of the House — having thwarted their own party’s Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, which would have imposed a nationwide cap on damages, from getting out of committee earlier this year on grounds that the federal government has no authority to overwrite state civil liability laws, and nationwide medical liability tort reform under a unified Republican government seems like even less of a slam dunk.

How Will Malpractice Litigation Be Affected?

While political partisans and healthcare pundits debated the constitutionality and/or practical effectiveness of the Affordable Care Act, the medical malpractice insurance industry was closely watching the U.S. court system as medical malpractice defense attorneys argued — both successfully and unsuccessfully — that provisions of the Affordable Care Act should impact a plaintiff’s ability to recover the cost of future medical expenses.

When a negative medical outcome occurs, the lion’s share of economic damages to a plaintiff is most often the costs pertaining to his or her future medical care. Depending on the age of the patient and the severity of the medical injury, the cost of future healthcare needs can easily stretch into the millions of dollars. Traditionally, it has been generally assumed that 100 percent of these medical expenses would be paid for out-of-pocket by the plaintiff. Life care plans have rarely, if ever, taken into consideration the benefits of the plaintiff’s health insurance that would abrogate many of the projected expenses. This is because — prior to the Affordable Care Act — healthcare insurance almost always carried preexisting condition exclusions as well as annual and lifetime expenditure limits.

Savvy medical liability defense attorneys recognized that the Affordable Care Act removed preexisting condition barriers and expenditure limits as well as required all Americans to obtain some basic level of healthcare insurance. If this is the case, they contended, why can’t the defense argue future medical expenses will never be fully paid by the plaintiff out-of-pocket, and as such, the health insurance they are required to carry should be considered as a collateral source of recovery, subrogating portions of the total cost of economic damages?

Rather than paying the total cost of the plaintiff’s life care plan, these defense attorneys argued, the defendant should only be required to pay for the premium costs of obtaining the plaintiff’s healthcare insurance as well as any associated co-pays and deductibles. This argument has had mixed results so far in the American court system.

In court decisions that barred consideration of the Affordable Care Act offset potential, the most common reasoning had been that the Affordable Care Act’s future is too unsettled. Judges opined that with the heated politics surrounding the Affordable Care Act, the legislation could be struck down in one of the many lawsuits challenging its constitutionality or repealed when the balance of power shifts in Washington, D.C. — especially when one political party has been campaigning almost exclusively on doing just that. This was the reasoning in a 2012 case in Alabama, a 2013 case in Illinois and a 2014 case in Pennsylvania, among others.

Conversely, courts in Arizona, California, Hawaii, Illinois, Michigan and Ohio have allowed the Affordable Care Act’s mitigating effect to be admitted into evidence. In the Hawaii case, the defendant was allowed to cross-examine the plaintiff’s life care planner on the setoff effect of the Affordable Care Act on future medical expenses. In the Michigan case, the court found that “insurance provided under the Affordable Care Act is reasonably likely to continue into the future and that its discussion before the jury is not precluded.” In the Ohio case, Jones v. MetroHealth Medical Center, the court reduced a $14.5 million future damage award to $2.9 million by offsetting amounts covered under the Affordable Care Act, but allowing recovery for premiums, out-of-pocket costs and other expenses.

“If the Affordable Care Act is repealed, you’re no longer going to be able to compel people to purchase health insurance and you’re going to lose the future damages argument,” said Paul Greve, JD, RPLU, executive vice president/senior consultant of the Willis Towers Watson Health Care Practice. “Everyone in our industry had been watching the case Jones v. MetroHealth Medical Center in Ohio. The lower courts agreed with our argument and it was on its way to the state Supreme Court where we hoped it would set precedent. If Hillary Clinton had been elected president and Ohio maintained a Republican Supreme Court, which it did, the chances were very high that Jones was going to be upheld at the highest level, and we would then have a case other courts around the country could look to. That’s probably not going to happen now. If the requirement to purchase insurance is repealed, the argument is probably dead.“

By Michael Matray, the Editor of the Medical Liability Monitor. He can be reached at editor@mlmonitor.com