“There’s no guesswork, there’s no, ‘Oh how am I going to be covered? What if they change this thing or that thing?’ You know what the deal is.”
In today’s episode, Jen talks with Anjali Singh about malpractice insurance. Anjali is a Certified Financial Planner and Financial Advisor. Anjali has some important tips for physicians especially when looking at negotiating a new contract or leaving your current employer. She and Jen discuss the types of malpractice insurance and the important differences between them. This is an eye opening discussion with an expert in her field. Tune in to hear what you really need to know about malpractice insurance when it comes to your livelihood.
Anjali is a Certified Financial Planner and Financial Advisor. She is a Trusted Resource of DocWorking. She specializes in disability, life, malpractice, commercial and workers comp plans. She has been working exclusively with healthcare providers since 2000.
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Podcast produced by: Amanda Taran
Please enjoy the full transcript below
Anjali: There’s no guesswork. There’s no, “Oh, how am I going to be covered?” “What if they change this thing or that thing?” You know what the deal is.
Jen: Hello, this is Jen Barna. Welcome to DocWorking: The Whole Physician Podcast. I’m so happy that you’re here with me today because I have a very special guest. One of our trusted resources, Anjali Singh, is here with me today from California. Anjali, welcome to the podcast.
Anjali: Thanks for having me, Jen. It’s so nice to be here.
Jen: Thanks for joining me. Anjali is a certified financial planner and advisor of Anjali Singh Insurance Services. Today, we’re going to talk about malpractice insurance. Anjali has some tips and knowledge, of course, that is really important for physicians, things that we should be thinking about when we’re looking at negotiating a contract and looking at a new policy. Anytime we’re changing groups or changing policies, there are some very important factors, and it’s important to know the difference between different types of policies.
Before we get started on that though, Anjali, can you tell us a little bit about yourself, what you do? I know you’ve been specializing and working with physicians, dentists, and other medical providers since 2000. Please tell us a little bit more.
Anjali: Yeah, sure. That’s exactly right. I’ve been working exclusively with healthcare providers since 2000. Because of the needs of healthcare providers, I originally started just with disability and life insurance. And then in 2009, I got licensed for, among other things, professional liability or malpractice because a lot of my disability and life clients wanted help in those areas. I am licensed for that only in California.
Jen: Tell us about the different types of malpractice insurance. What are the pros and cons? I know of two types, but I’m curious, first of all, whether you mind telling me about more than two?
Anjali: Nope, that’s it. There’s only two. There’s claims made and occurrence. What they have to deal with is how you’re actually covered. With claims made, you’re covered as of when the claim is made. Let’s say somebody treats a patient on January 1st, 2021, and there’s an allegation that there was a malpractice issue, Valentine’s Day 2022. Your policy also runs from January 1st to January 1st. If you have a claims made policy, you’re covered as of Valentine’s Day 2022, even though the work happened New Year’s Day, 2021.
The challenge is that policies can and do change over time. So, if there’s an issue brought up in a different year, then when you saw the patient, there could be a challenge if there was something changed in the policy, and along with how that duration works where there can be a lag between when the patient work is done and when the issue pops up, that is actually why claims made policies need a tail plan or tail provisions. All a tail plan is, I get a lot of head scratching are like, “What is that?” Tail is simply a fee you pay for the past work. If any claims come in after that claims made policy has ended, there’s coverage there to protect it.
Typically, in the physician world, if there’s a claims made plan at a group practice or a hospital, the hospital or the provider will often also provide the tail to the physician. On rare occasion, that can be put on the physician to provide it for themselves. That’s one of the things you want to pay attention to in your contract negotiation. If you the physician have to provide the coverage for yourself, tail plans run anywhere from one to sometimes as high as two times the base premium. Depending on your specialty and other factors, that can be a very expensive policy. We’re talking tens of thousands of dollars. Oftentimes with tail plans, actually, I’ve never seen one where they didn’t require full payment. On tail policies, unlike regular ones, they don’t do installments. When they issue the tail plan, the money is due all at once.
Now, occurrence basically has tail built in, so you don’t need to worry about it. So, that same example, January 1st, 2021, you see the patient and then they sue February 14th 2022. On an occurrence policy, you’re covered as of the January 1st date when the work happened. So, you know how you’re covered and any policy changes that happened in 2022 don’t matter to you. That’s why out of the two, if the physician has any say-so as to what coverage they have, I recommend occurrence because there’s no guesswork. There’s no, “Oh, how am I going to be covered?” “What if they change this thing or that thing?” You know what the deal is. With occurrence, because you’re covered as of the day the work occurred, you don’t have to worry about tail coverage because it’s basically built in.
Jen: Absolutely. The bottom line is if you have a claims made policy, and you decide at some point that you’re going to leave the practice that you’re currently working in, in order to leave that practice, you should purchase tail insurance, because once you leave, you’ll need to be covered for what you’ve done in the past for however long the statute of limitations is, and that means that in order to leave that practice, you potentially could end up needing to pay out of pocket in one lumpsum tens of thousands of dollars. So, it is really important to know that going into your contract negotiation so that if you are going to join a practice, where you’re responsible for your own tail coverage with a claims made policy, so that you know, if I ever decide to leave this, I need to have this much money in the bank, because there’s basically nothing that you can do other than pay that or make yourself liable by not having coverage. That’s a really important distinction.
Another point that you bring up, which I do think is really worthy of some further discussion on some other podcasts potentially. The truth is that physicians get sued, whether they’re good or bad, the way our system works. Up to 83% of OB-GYNs, for example, get sued at some point in their career. Specialized surgery, 80%. Radiology is not very far behind that, 76%. Those are just figures in general for physicians at some point in their career. If you’re in one of the top 10 specialties that are most likely to get sued, then you’re probably somewhere close to that number. It’s definitely important and worthwhile to know about your options, and think about this at the beginning of your commitment to a job and know what type of policy you’ll have.
Anjali: I’d definitely like to add that the stats on claims, claim severity as well as claim frequency are both going up. Some of the stats we have are probably a little behind because they haven’t caught up to the more frequent suits.
What I’ve heard from some risk management folks is that when a doctor does end up in court, the judgments can be higher than they were before, and it’s just a reflection of our society. People are just not as happy. When the juries come back, they often come back with higher payouts than they did 10, 15 years ago. It’s really, really unfortunate, because obviously, people go into the medical field to help, but that’s what’s happening. Frankly, it’s even happening in dental, which, before I’d say about 10 years ago, the stats on dentists, they would get sued, on average, once in their career. Most of them wouldn’t, and that’s gone way up as well. It’s happening across other healthcare fields as well. It’s not just physicians.
Jen: We can get into some very interesting discussions at some point on the podcast, and I think we should about the future of healthcare. Healthcare in our society is affected by the rates of malpractice insurance, which is getting more expensive as well in order to compensate for those rises in claims. Do you have any other insights on malpractice insurance that you’d like to share or any stories specifically?
Anjali: [laughs] I try not to share my stories. My husband jokes that he’s paranoid about care because of all the stuff he hears. [laughs] I would say, again, definitely pay attention to your contract as to what your obligations are, because if you’ve committed that, when you leave the group practice that you will purchase the tail plan, like you wisely said, Jen, you need to have that money in the bank. There are some tail policies where they won’t take credit cards, they’ll only take checks. Now, I realized mechanistically, you can do a credit card advance or whatnot, but it still has to come through there. If you don’t buy the tail plan, it’s as if you are never covered. If you’ve been at a practice five, seven years, you leave and you forget to buy the tail plan or you don’t exit on the best terms, and you don’t want to talk to the office manager anymore, those five or seven years are uncovered, which is scary. Then, basically, your assets become your coverage.
Then, as you bounce along, keep copies of your certificates. You might need them in the future if you do have a claim. With physicians, it’s very common, I do not judge when I come across somebody that has that. There are reports that you get from your provider called a loss run. Think of it like your driving record, but for your medical license. You want to periodically ask for copies of your loss run, because if you have to sign up for a plan, and you’ve had a claim, those reports are very important. Sometimes, when you’ve left a practice and you’ve left a carrier, that can be a little harder to track down. I recommend to my clients to set up some kind of secure way online, or what have you, to store copies of your old certificates. Especially if you had claims made, some of the carriers want to see that to look for a date that’s important on there. It’s called a retro date. That’s basically the beginning date of your coverage. You want keep copies of any tail plans if you purchased that, and you want to keep a copy of any loss run reports that you have access to.
Jen: Excellent advice. Thanks so much, Anjali, for coming on and talking with me today. Really important tips and excellent advice. Thank you.
Anjali: Thank you so much for having me. I really appreciate it. It’s amazing what you’ve done with the site to be a resource for physicians. Thank you for that.
Jen: Thank you for being part of it. We’re excited to work with you and to tap into your expertise. I’m looking forward to future conversations. Thanks for being a trusted resource as well.
Anjali: Thank you so much.
Jill: Thanks all of you for tuning in to listen to this edition of DocWorking: The Whole Physician Podcast. We have something new and exciting to tell you about, so I want you to hop over to docworking.com. DocWorking Thrive is getting ready to launch in a very short time. What that is, is a subscription service for physicians. It includes an excellent self-paced course called Stat that is all about quick wins for living well. It is group coaching. It is a Facebook group where you have a chance to connect to other physicians and coaches to ask questions about things that are happening in your life. It also includes weekly video tips to come and give you advice on important things in your life. We’re really excited about this.
The price is almost too good to be true. It’s so good. It’s going to be a fabulous support network for physicians. We hope you hop on over. Check out Doc Working Thrive today. Until next time, we’ll see you on DocWorking: The Whole Physician Podcast.
Amanda: Hello, and thank you for listening. This is Amanda Taran. I’m the producer of the DocWorking Podcast. If you enjoyed our podcast, please like and subscribe. We would also love it if you check out our website which is docworking.com. And you can also find us on YouTube, Facebook, Twitter, and on Instagram. On Instagram, we are @docworking1, and that is with the number one. When you check us out on social, please let us know what you would like to hear on the podcast. Your feedback really means a lot to us. If you’re a physician with a story you’d like to tell, please reach out to me at [email protected] to apply to be on the podcast.
Thank you again and we look forward to talking with you on the next episode of DocWorking: The Whole Physician Podcast.