Types of Malpractice Insurance for Nurse Practitioners, Physician’s Assistants and Allied Health Care Professionals

Posted in: Commercial Insurance

The Journal of the American Board of Family Medicine reported in May 2013 that 50 percent of U.S. doctors now report employing nurse practitioners, physician’s assistants, or certified nurse midwives as part of their medical teams.

To date, the main reason for the shift toward more nurse practitioners and physician’s assistants has been simple: they cost less to employ than doctors.

A report from the Association of American Medical Colleges (AAMC) showed that although patients still ultimately preferred their physicians for primary health care, they were willing to be seen by physician’s assistants or nurse practitioners if it meant more timely access to care. Plus, the AAMC noted in September 2012 that the nation’s physician shortage could reach 90,000 by 2020 – yet another factor in the growing role of nurse practitioners and physician’s assistants.

Now, as the Affordable Care Act kicks in, potentially millions of Americans will be required to join the ranks of the insured, driving demand for primary health care even higher. Increasing numbers of allied health care professionals are likely to help bridge the gap. With this increase, of course, comes an inherent risk.

Years of Schooling vs. Liability

We have decades of data on medical malpractice lawsuits filed against doctors. Because nurse practitioners and physician’s assistants in large numbers are still comparatively new in the health care system, there is little data to measure against their risk of exposure to malpractice suits.

Hundreds of doctors trust PSA with their Medical Malpractice.

Types of Malpractice Insurance for Nurse Practitioners

With the possibility of increased patient caseloads, the allied health care professional needs appropriate malpractice insurance for nurse practitioners to be fully covered in the event of a lawsuit.

Both doctors and allied health care professionals should consider the following points when designing their medical malpractice insurance program:

  • First and foremost all parties should look carefully at the employment contract. The contract should spell out the type of coverage for each caregiver who will pay and how that coverage will be funded.
  • A doctor should be fully aware of his/her supervisory responsibility for allied health care professionals in his/her practice. Typically, physician’s assistants are required to operate under the direct supervision of a doctor, while nurse practitioners are afforded a bit more latitude – in 18 states and the District of Columbia, they can “diagnose and treat patients and prescribe medications without a physician’s involvement,” according to the Journal of Health Affairs. In the event of a malpractice suit, the supervising doctor’s level of involvement with the allied health care professional’s actions with the patient could come into play.
  • Individual vs corporate medical malpractice insurance: Normally, practices have two main options for insuring allied health care professionals—buying a separate individual nurse practitioner malpractice insurance for the employee or adding the employee to the corporate policy. Adding the employee to the practice’s corporate policy is less expensive (with lower premiums) on the front end. However, in the event that the nurse practitioner or physician’s assistant is the target of a malpractice suit, the costs for that suit will count against the limit on the corporate policy. If more than one member of the practice were sued at the same time, the legal costs could exceed the policy limit, meaning the practice would have to pay the remaining costs out of pocket. Conversely, an individual policy will cost more in premiums but would provide more individual coverage in the event of a suit.
  • What happens to the policy when a nurse practitioner or physician’s assistant leaves the practice? If the employee were listed on the corporate policy, he/she is typically still covered for future claims that arise from the period when he/she worked at the practice. In this case, however, the departing nurse practitioner or physician’s assistant should continue to make sure his/her former employer is keeping its nurse practitioner liability insurance policy funded and up to date.
  • Tail policy: A nurse practitioner or physician’s assistant who owns his/her own medical malpractice insurance for nurse practitioners and leaves his/her job should consider a “tail” policy, which provides coverage against lawsuits after he/she’s cancelled the policy.

Regular review of your malpractice insurance so that you and your staff are secure and your business is safe in the event of a lawsuit is absolutely imperative. If you have any questions about the types of malpractice insurance for nurse practitioners or physician’s assistants or any other matter relating to your practice, please check out my “Physician’s ‘Plain English’ Guide to Insurance for your Practice” or contact me directly at ssherman@psafinancial.com.