If you practice medicine without sufficient professional liability insurance (PLI), you are exposing your medical license to serious risks. Medicine is a hazardous endeavor due to the ever-expanding threat of legal action. Too often physicians feel safe to practice medicine because they mistakenly believe that their PLI will always defend them and make all necessary indemnity payments. Unfortunately, this belief is misguided and incorrect.
The omnipresent danger of medical negligence claims has made physicians generally aware of the need for good PLI. But, few physicians give much thought to the threat of state administrative (disciplinary) proceedings against their medical licenses. Those actions can result in steep monetary fines and license sanctions, including suspension or termination.
With the stakes so high for administrative penalties, physicians need to know how to obtain PLI which specifically addresses administrative proceedings coverage and the protection of their professional licenses. Unfortunately, busy physicians do not have the time to research the details of different PLI policies. There are many pitfalls to consider when obtaining PLI and a little bit of knowledge can help physicians make better choices, select appropriate coverage, and thus have more enjoyable and fulfilling practices.
Many physicians are unaware of the need to have administrative proceedings coverage (also called administrative defense reimbursement coverage) in addition to medical malpractice coverage as part of their PLI. Fortunately many PLI policies include at least some administrative proceedings coverage, even if it is limited.
The following questions address issues that physicians should consider when selecting PLI that includes administrative proceedings coverage.
I. Does your professional liability insurance include administrative proceedings coverage?
Some PLI includes coverage for administrative proceedings, some provide limited coverage, and some nothing at all. Always check your PLI policy to determine what level of coverage you have.
Coverage for legal services in connection with proceedings of a state board of medicine is a benefit of insurance that is not universal . State Boards have become much more aggressive in investigating medical care provided by their licensed physicians. Thus, obtaining insurance coverage for legal services in connection with such proceedings is important.
Read your PLI insurance policy carefully and determine what coverage it includes for administrative proceedings. If your employer purchases your PLI coverage, then ask for a copy. You have a right to see the policy.
II. My professional liability insurance includes administrative proceedings coverage, so I have nothing else to worry about, right?
Wrong, you must still read your policy carefully to determine if you have sufficient coverage to properly protect your professional license. It is vitally important that you understand what is included and what is not included. Insufficient coverage could leave you owning tens of thousands of dollars in fines and legal fees and not provide you with income assistance while your license is suspended or revoked.
III. My professional liability insurance policy includes administrative proceedings coverage only when it results from a medical malpractice claim. What does this mean?
Many insurance policies provide administrative proceedings defense only when it results from a medical malpractice claim. Although administrative and malpractice actions can arise from the same incident, it is often the case that an administrative action occurs independently without a malpractice claim. In which case the physician would be without coverage for the administrative proceedings.
There are many other ways that your license can be attacked besides a medical malpractice action, including disgruntled patient or staff complaints, state and federal agency investigations, criminal activity, and substance abuse issues, just to name a few.
Therefore, be sure to contact your insurer (or agent) and add administrative proceedings coverage. With most insurers you will have to pay an extra premium to obtain this coverage. Some PLI insurers do not offer administrative proceedings coverage, so you will have to purchase a completely separate policy.
IV. My professional liability insurance policy does not include administrative proceedings coverage. What should I do now?
Frequently, PLI does not provide coverage for administrative proceedings. This is often true of insurance purchased through professional associations and other less expensive PLI providers. For those physicians who do not have administrative proceeding coverage it is important for them to consider purchasing coverage on their own or to self-insure.
If you decided to self-insurer, designate funds that can be immediately available to pay for legal fees and fines. Identify and retain a qualified professional licensing attorney so the attorney is readily available to handle your administrative proceeding issues if and when they arise.
V. What should my administrative proceedings coverage include?
It is very important for every physician to carry insurance that covers any investigation, complaint, or administrative hearing that might be filed or opened against his/her license.
At a minimum your policy should indemnify you for up to $25,000 in legal fees, expenses, and fines related to actions brought against you by administrative entities. These entities include the Department of Health (DOH), the Agency for Health Care Administration (AHCA), the Board of Medicine (BOM), the Drug Enforcement Agency (DEA), and other state and federal agencies.
VI. Does your employer provide your professional liability insurance?
If you are a physician employed by a hospital or other corporate entity, then you are likely covered by your employer’s group PLI policy. But do not assume that your employer’s PLI policy includes administrative proceedings coverage. Be sure to verify the extent of coverage that your employer has purchased. If your employer will not show you the policy, but tells you that you are covered for administrative proceedings, then ask for a written statement documenting that your employer will pay for your legal defense for any such matter arising during your employment.
Beware that even if you employer’s PLI includes administrative proceedings coverage, your employer could terminate you and then file a complaint with the DOH. The DOH then opens an investigation against you, but your former employer’s policy will not pay for your legal defense costs if it was the employer that terminated and reported you. Therefore it is important to purchase administrative proceedings coverage apart from your employer.
VII. Should I buy administrative proceedings coverage from an insurer that allows me to select my own attorney?
Yes, purchase coverage through an insurance company that allows you to select your own attorney and does not make you use one that the insurance company assigns you. This will allow you to meet with attorneys of your choosing and then select someone with whom you identify and feel comfortable. It is important to have a good relationship with the attorney handling your case. If you are assigned an attorney, you lose the ability to select someone who is caring, interested, and willing to help you in a very important manner.
VIII. Why is it important for me to keep my medical license free from administrative and disciplinary actions?
Some physicians think that as long as they are permitted to keep their license after a disciplinary action then they will be allowed to continue practicing medicine. While this may be technically true, after a disciplinary action you may find it harder to find work as a physician.
For example, most health insurance providers, including Cigna, require verification of your unrestricted state medical license . If you are unable to get credentialed by an insurer because you had a disciplinary action against your license, then even though you are licensed to practice medicine, you will not be able to treat patients and submit bills for payment from that insurer.
Often physicians are licensed in several states. If so, each time a licensing action is taken you will need to report it to all states. This generally results in multiple administrative actions, for the same course of conduct. Defending all the claims without adequate insurance coverage can and will be very expensive.
Therefore, you must always vigorously defend yourself during administrative proceedings through representation from an experienced professional licensing attorney.
IX. I already have administrative proceedings coverage, what should I do when I get notification of a pending action?
The best way to proceed is to immediately contact a professional licensing attorney. Your attorney will assist you in meeting the terms of your policy and in preparing a proper defense. Your valuable administrative proceedings coverage could be lost if you do not take appropriate action under the policy. For example, some insurers require that you notify them of any complaint, audit, probe, or investigation within 48 hours after receiving notification. If you fail to meet this provision the insurer may attempt to refuse coverage in a subsequent administrative proceeding. A professional licensing attorney will assist you in all aspects of your defense, including working with your insurance carrier if necessary. Chapman Law Group’s professional licensing attorneys are available to answer any of your questions or provide a defense when necessary.
Chart of Florida Administrative Complaint Process for Health Professionals