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Research & Analysis

Billing E&O Insurance: 3 Healthcare Segments That Need It

January 24th, 2017 | 3 min. read

By David Huss

(Part 3 of a 3-Part series of posts that explore the need for Medical Billing E&O insurance)

In the first installment of this three article series, Medical Billing E&O – The First Thing Retail Agents Need To Know, I point out that healthcare organizations billing for medical services have significant exposure to the consequences of billing errors as well as the primary mechanisms through which billing errors are identified and consequences imposed.  In the 2nd installment, Medical Billing E&O – Start With These Three Questions, I detail some of the primary coverage considerations retail agents need to contemplate when determining the best product for their healthcare clients.  In this final article of the series I provide a bit more clarification on the kinds of healthcare organizations that need Billing E&O insurance coverage.

As you will see below, the need for Billing E&O insurance within the healthcare industry is substantial, in part because the healthcare industry itself is so expansive.

The following are three segments of the healthcare industry that need billing E&O insurance:

Medical Services

Most people know the world of Medical Services lies at the heart of the healthcare industry.  In addition, most in the professional insurance arena with a focus on the healthcare industry also understand that many organizations residing squarely within the world of Medical Services have significant exposure from their medical billing practices.  From individual physician practices to large physician groups, hospitals to miscellaneous medical facilities of all kinds, if they are billing Medicare, Medicaid or health insurance companies (either directly or via a third party biller) they are exposed to what can be the very costly consequences of billing errors.  The fact that the exposure to billing errors extends well beyond the world of Medical Services however, is lesser known.

Aging Services

Consider the world of Aging Services.  The healthcare industry overlaps the world of Aging Services primarily in the classes of nursing homes/skilled nursing, home health and hospice.  Assisted living facilities should also be included in this list, however much less of these facility’s services can be considered true healthcare.  These classes of business in particular have significant exposures from billing errors, in large part because the services they provide are heavily funded by Medicaid or Medicare.  As an example, according to the Medicaid website Medicaid is “…the primary payer across the nation for long term care services.”  In fact, in 2014 alone $116B, or about 25% of the entire Medicaid budget for that year, went towards payment for long term care services.  While it is true that Medicaid’s definition of “long term care services” goes well beyond those provided by the above listed Aging Services classes of business, the exposure these classes have to Medicare and Medicaid billing errors alone are substantial.

Social Services

Consider too the world of Social Services.  Many classes of Social Services business are already extensively funded by Medicaid, and so they already have substantial exposure to billing errors.  Now however, as detailed by my recent article, Physical Healthcare & Behavioral Healthcare – Two Worlds Colliding, medical services are being increasingly integrated into the offerings of social services operations.  Behavioral health organizations (including both mental health and addiction medicine) are on the leading edge of this integration, and so they are now billing for medical services as well as the mental health and addiction medicine services they were already providing.  The exposure to billing errors for these classes of business will continue to increase going forward.

The U.S. healthcare industry is a big place and exposure to billing errors can be found in many different classes of business that fall within its borders.  If you are a retail agent with clients residing in the healthcare industry and need assistance with Billing E&O insurance placements, give Ethos a call.

Ethos Insights:

  • The need for Billing E&O insurance is substantial for many different classes of business within the U.S. healthcare industry.
  • Many retail agents don’t realize that classes of business in the worlds of Aging Services and Social Services have significant exposure to the consequences of billing errors.
  • Ethos can assist with the placement of Billing E&O insurance no matter where a particular class of business is found within the expansive U.S. healthcare industry.

David Huss

David is Ethos’ Co-Founder and Chief Production Officer. He has decades of experience in the insurance industry during which he has played many roles, including that of a contract writer for a reinsurance brokerage firm, a management liability underwriter and, over the past 20 years, a wholesale broker focused exclusively on the healthcare professional liability (HPL) space. As a true HPL specialist David possesses a comprehensive understanding of professional liability exposures in the healthcare industry and is well-versed in the products and capabilities of Ethos’ numerous carrier partners. His role at Ethos includes supporting production support staff in their effort to efficiently solve HPL-related problems for retail customers, mentoring Ethos’ business development staff and working to develop and maintain relationships with carrier business development staff and underwriters. Personally, David enjoys building things, whether they be home projects or business ventures. He also enjoys sharing good food and good wine with friends and family. David looks forward to continuing to build Ethos and serving retail customers for years to come.