Malpractice Insurance Frequently Asked Questions
Question:
What is malpractice insurance?
Answer:
Malpractice insurance is insurance that professionals buy to protect themselves from the financial effects and costs of being sued. A malpractice insurer agrees, through an insurance contract, to investigate claims, provide legal representation, and accept financial responsibility for payment of claims up to a specified monetary amount during the policy period. This coverage is provided in return for a fee, the medical malpractice premium.
Question: What is medical malpractice?
Answer:
Medical malpractice is the failure of a physician to exercise the degree of care and skill that physicians in the same medical specialty would use under similar circumstances. It is a form of negligence, and it means the failure to meet accepted standards of medical practice.
Question: How do malpractice insurance costs affect services in a rural community?
Answer:
High malpractice premiums can contribute to health care access problems in rural areas by causing physicians to eliminate higher risk services such as obstetrics and certain kinds of surgery. Patients requiring those services then must travel further for care or be transferred to a facility where the services are available. High premiums can also make it difficult to recruit or retain an adequate number of physicians in rural areas, or to recruit certain specialists whose premiums are high.
Question: What are the reasons for increases in malpractice insurance costs?
Answer:
Beginning in the late 1990's, malpractice premiums began to increase rapidly for many physicians, especially in certain states. The U.S. Government Accounting Office reported in 2003 that these increases were due to a combination of several factors: increased losses to malpractice insurers in paying malpractice claims, decreases in investment income of insurers, decreased competition among insurers because a number of insurers left the medical malpractice market or became insolvent, and increased costs of reinsurance, which increased overall costs to insurers.
Question: How can a health care provider or a health care facility in a rural area decrease the costs of malpractice insurance?
Answer: A health care provider or a health care facility may decide not to engage in certain kinds of procedures or aspects of practice that prompt a higher premium. Healthcare providers may wish to consult a specialist in professional liability insurance to identify specific ways to decrease their malpractice insurance cost.
Question: What is the Federal Tort Claims Act (FTCA)?
Answer:
The Federal Tort Claims Act is a law that allows civil lawsuits to be brought against the United States for negligent acts of its agents. The United States has sovereign immunity and cannot be sued in a tort action unless a federal law waives that immunity. The FTCA waives immunity to allow certain claims against the U.S. government. A patient who is injured as a result of negligent health care at a U.S. government health care facility (such as a VA, Indian Health Service, or Public Health Service facility) may have the right to bring a malpractice claim under the FTCA if the injury was caused by a federal employee.
Question: How can the FTCA affect rural health?
Answer:
The Federally Supported Health Centers Assistance Act (FSHCAA) of 1992 and the 1995 reauthorization, commonly referred to as the Federal Tort Claims Act or FTCA program, created a medical malpractice insurance program for Federally Qualified Health Centers (FQHC) that offer full medical malpractice protection for health center activities at no cost to grantees who participate. These are the FQHCs that are funded under section 330 of the Public Health Service Act and are commonly known as Community Health Centers, Migrant Health Centers, Health Care for the Homeless Centers, and Health Care for Residents of Public Housing Centers. FQHC look-a-likes, an organization that meets all of the eligibility requirements of an FQHC but does not receive grant funding,
are not eligible for the FTCA program.
Under the FSHCAA of 1992 and 1995, Health Centers - their officers and staff - funded under section 330 of the Public Health Service Act can apply to be "deemed" federal employees for the purposes of medical malpractice and thereby become immune from lawsuit. This program is designed to reduce or eliminate the need for "deemed" Health Centers to purchase private medical malpractice insurance thereby allowing more funds to be available for direct service to underserved populations.
Question: What benefits may be available for volunteers at free clinics under the FTCA?
Answer: Approved volunteer health professionals may receive FTCA immunity malpractice protection for volunteer work at approved free clinics. Once “deemed,” volunteers are covered for a one-year period subject to an annual application approval, submitted to the Bureau of Primary Health Care. This coverage is extended to the individual volunteer and is free of charge to the free clinic. This program is currently limited solely to volunteers conducting approved medical services. Other coverage is required for paid staff and organizational entities. Additional guidance may be secured at The Health Center Program: Federal Tort Claims Act website.
Question:
What have the States done to address malpractice insurance issues?
Answer: As of May 2007, 24 states have enacted or have pending medical malpractice reforms in the 2007 legislative session. According to the National Conference of State Legislatures most of the legislation has focused on traditional tort issues such as limits to non-economic damage awards, the allocation of plaintiff attorney fees, expert witness standards, and the inadmissibility of apology statements by health care practitioners. There has also been an increase in legislation regarding greater accountability for insurance companies and state controls of premium rates. See the National Conference of State Legislatures resource titled State Medical Malpractice Reform Action 2007 for additional details.
Credits
Last revised 07/07/2008
