Who Pays for Your Prior Acts Medical Malpractice Insurance Coverage?

side note: This is an interesting, and likely unforeseen, aspect of the current rush of independent doctors to hospital employment. Who pays for the physicians’ tail, or prior acts, coverage? According to this article, that may be determined by which specialty a doctor practices in or how high of a demand their is for the particular physician. The more a hospital needs a particular healthcare worker, the more likely they will be to purchase the doctor’s tail coverage. That said, different hospitals are approaching this differently. If you are a physician considering whether or not to move toward hospital-based employment, prior acts coverage is a considerable expense, and likely something you will want negotiated prior to accepting employment.

October 16, 2011 – 6:00am

As hospitals look to bring self-employed physicians on board as employees, a key issue is addressing those physicians’ medical malpractice liability tail exposures.

Hiring hospitals can either ask those physicians to cover the risk themselves or, as is increasingly the case as they look to provide an incentive for physicians to join them as employees, the hospital can take on the med mal tail and prior acts exposure in its own insurance program.

“As a broker, ideally if we have doctors who are on claims-made policies, we like to see them buy their own coverage and close out their tails and start fresh with the hospital,” said Merry Robinson, team leader and client service manager at Brower Insurance Agency L.L.C. in Dayton, Ohio.

But as hospitals compete with other health care systems to recruit physicians to join their staffs, there are sometimes internal conflicts between what offers the most straightforward risk management approach and hospital development efforts.

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