Healthcare Consultants – A Challenging Professional Liability Placement
Within the realm of healthcare there is a class of business we refer to collectively at Ethos as “healthcare consultants”. Our definition of a healthcare consultant is a licensed medical provider(s) delivering professional services other than traditional direct patient care. Proper placement of professional liability insurance for healthcare consultant risks is challenging because despite the lack of medical treatment there is often at least an incidental exposure to bodily injury driven claims. The result? A risk that falls somewhere between those targeted by miscellaneous professional liability (aka Miscellaneous E&O) and medical professional liability products. By definition, a very difficult risk to properly place.
Healthcare consultants can be any kind of medical provider, but they are most often physicians. Typically, these physicians are looking to supplement the income generated from their medical practice. However, rather than provide the direct patient care services they are highly trained to deliver, they take advantage of an opportunity to provide other kinds of professional services.
A good example of this is a physician providing independent medical examinations. An independent medical examination is typically requested by a worker’s compensation company when they disagree with a course of medical treatment chosen by a treating physician. In this case the worker’s compensation company contracts with independent third-party physicians to determine, via a physical exam, whether he/she agrees with the treating physician’s treatment regimen. If the independent medical examiner disagrees with the course of medical treatment being provided by the treating physician, the worker’s compensation company may well require it be modified accordingly.
Another example of a professional liability risk we associate with healthcare consulting is a physician providing medical file reviews. This activity involves the services of a contracted physician that is typically hired by insurance companies and/or independent review organizations to review pertinent medical file(s) and answer questions related to utilization review such as how reasonable and necessary a treatment regimen is. File reviews can be either prospective (in which a patient is being provided ongoing treatment) or retrospective (in which the treatment regimen has been completed).
In each instance, we have a physician that is contracted to provide professional services other than traditional direct patient care. The primary exposure from the professional services being provided in both cases is probably to financial loss driven claims. A financial loss driven claim under these circumstances would typically occur if the hiring entity felt the physician was negligent in the provision of the professional services provided under the contract. If that were all there was to these risk profiles, we could simply provide the insured with a miscellaneous professional liability policy and be done with it. But the exposure profiles for healthcare consultants are not that simple.
The reason healthcare consultant risk profiles are complicated is that in both cases there is not only the exposure to financial loss driven claims, but also the possibility that the professional services being provided by these contracted physicians could alter an ongoing treatment plan implemented by another physician. As a result, each could be drawn into a bodily injury driven claim if the altered treatment regimen allegedly or actually results in an injury to the applicable patient(s). Miscellaneous professional liability policies typically exclude claims resulting or related to bodily injury, so that kind of placement would be insufficient to adequately cover the exposure.
On the other hand, a standard medical malpractice policy wouldn’t typically suffice either. This is because the vast majority of med-mal policies require that a physician-patient relationship existed between the insured and plaintiff in order to respond. That is typically not the case with healthcare consultants. Even in those situations where a med-mal policy recognizes a physician-patient relationship, or perhaps waives the requirement all together, the healthcare consultant might still come up short on coverage. This might happen for many reasons, including the lack of information provided to the underwriter about the healthcare consultant services being provided, a practice location limitation or perhaps an applicable exclusion in the med-mal form.
Proper placement of what we call “healthcare consultants” here at Ethos is not easy. Professional liability products that will extend coverage to financial loss driven claims and bodily injury driven claims without the existence of a physician-patient relationship are very few and very far between. That’s why it is so important to partner with a wholesaler that is a true healthcare specialist when placing these kinds of risks. If you don’t, you may well end up paying more for your wholesaler than you thought you would.
Give Ethos a call and we’ll be happy to answer any questions you might have about the proper placement of professional liability insurance for healthcare consultants.