“Arguably one of the most overlooked yet incredibly important aspects of your malpractice insurance policy is the Consent to Settle Provision. You’re paying thousands of dollars a year for your malpractice insurance; you should have a say in how your claims are handled, don’t you think? Today we’re going to talk about the consent to settle provision – why it’s important, how carriers can limit you, and what you can do to ensure that you’re in the driver’s seat for the handling of your malpractice claims in the future.

One of the most important features of a malpractice insurance policy is the consent provision, which gives you the authority to settle (or not settle) a claim that you are involved in. While this may feel like it does not concern you now, it could make a huge difference if and when you are involved in a malpractice case in the future.”

Jennifer Wiggins is a health care executive.

She shares her story and discusses her KevinMD article, “Understanding consent-to-settle in your malpractice insurance policy.”

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Rate and review the show at KevinMD.com/rate. Subscribe at KevinMD.com/follow.

Today on the show we have Jennifer Wiggins. She is a medical malpractice insurance expert, and she wrote the KevinMD article “Understanding consent-to-settle in your malpractice insurance policy.” Jennifer, welcome to the show.

Jennifer Wiggins: Thank you so much for having me.

Kevin Pho: So we’ll get into your article in a little bit, but first off, can you share your story and journey to where you are today?

Jennifer Wiggins: Sure. I’ll give you the CliffsNotes version. I’ve been in the malpractice insurance industry for 20 years. I started my career working for one of the nation’s largest carriers, and my job there was basically to be a direct sales agent. So I would work with doctors like you, selling a policy from that particular carrier, giving them quotes, and servicing their coverage.

But throughout my career, I really discovered that there were two gaps in the malpractice market. Number one was just flat-out education. Doctors know a lot about health care, but very little as it relates to medical malpractice insurance in particular. What kind of coverage do I need? What kind of carrier is the best? How do I choose? How do I make sure I’m getting great coverage without overpaying? Those were some of the questions I was hearing, and I realized there was really a need in the market to help fill that knowledge gap.

The other thing I was experiencing was that walking into a doctor’s office and saying, “Hey, I’d like you to buy this one insurance from this one carrier that I work for,” seemed especially self-serving. Whereas if I could come into a practice and say, “Hey, my job is to be your advocate, your ally, and I’m here to help you get quotes from everyone in the marketplace, and then we will objectively compare and find the one that’s the right fit for you.” So at that point in time, I knew I needed to make a pivot in my career. After 16 years with that company, I resigned and did what many people do in taking the leap of faith to start my own business.

So Aegis Malpractice Solutions is a boutique insurance agency. We only do medical malpractice insurance for health care providers. We focus in particular on independent practitioners, or those who still need to buy their own insurance. We’ve been doing that for about three years now, and it’s been an exciting journey.

Kevin Pho: I think everything you said about physicians not necessarily knowing too much about medical malpractice insurance rings true. A lot of us just sign on the dotted line and accept whatever is presented to us. What would you say are some of the biggest misconceptions about the medical malpractice insurance industry that physicians should know about?

Jennifer Wiggins: Yeah, so I’ll speak particularly to what you just described, which is signing on the dotted line as an employee, or accepting a policy that’s being given to you at the time of employment. That’s certainly a great benefit. Obviously, malpractice insurance is rather pricey, so for that to be included in your compensation package is a great benefit. But there are a few things that could be limiting factors that most doctors aren’t thinking about.

The first one is what type of coverage it is. Are they giving you an occurrence policy? Are they giving you a claims-made policy? If it’s a claims-made policy, who’s responsible for buying that tail insurance if and when you leave? Is that your responsibility? Is that your employer’s responsibility? What are the stipulations around that? Do you have to buy it from a particular carrier? There are a lot of gray areas in that particular subject that most doctors are not asking about proactively at the time of signing their contract.

The other thing they’re not asking about is limited scope and duty coverage. Is this malpractice policy only covering me for the work that I’m doing for your facility, or do I have the flexibility of doing anything else? For example, if I want to volunteer at the free clinic on the weekends, am I covered for that? If I want to go do locum tenens for a friend from residency who’s on vacation, and I want to fill in for him, can I do that? Most of the time, doctors are not asking those questions when they sign their contract, yet most employed policies are limited, meaning they only cover you for what you do for that network.

The third thing is actually what our article was written about, and that’s the issue of consent to settle. As it relates to malpractice insurance, one of the biggest issues we see is the issue of consent to settle, or lack thereof. Consent to settle is a huge issue for doctors because of what it does. If your policy has a very specific consent provision that puts you in the driver’s seat, that means the insurance carrier can never settle a malpractice case or an action on your behalf without your approval.

And obviously, as you know as a doctor, even getting named in a nuisance claim or little nit things, if there’s a payment made, whether it’s a settlement or an indemnity payment, that gets reported to the National Practitioner Data Bank, and that goes on your record forever. So if you don’t have consent, you’re somewhat handcuffed, and you allow your employer to handle your case how they see fit. If they want to keep their name out of the newspaper, if they don’t want the big PR stink, if they want to write a check and get out of it for as little as possible, you could get dragged into something that you maybe weren’t involved with at all.

Kevin Pho: Sure. So let’s talk more about that article. Like you said, it’s titled “Understanding consent-to-settle in your malpractice insurance policy.” Now, in general, when physicians accept medical malpractice insurance in their employed contracts, what proportion have these consent-to-settle policies in them?

Jennifer Wiggins: So most of them have, I’ll say, weak consent provisions. They like to say they have consent, but usually there are some caveats. So, “We’re going to give you consent unless we determine that you are being unreasonable,” or, “We’re going to give you consent unless you no longer work here, and then you don’t get consent anymore.” So almost all of them have some sort of consent; very few of them have pure consent. If I could give it a percentage, I’ll bet you 30 percent of them have pure consent, and the rest have some sort of stipulation as it relates to the reasons why they can pull that away from you if they want to do so.

Kevin Pho: So I just want to be clear: If a physician settles a lawsuit, their name can be included in a national practitioner database. What other repercussions do physicians have if they settle lawsuits?

Jennifer Wiggins: Well, obviously it goes on your record, so it gets reported to the NPDB. When you go to get credentialed, whether it’s for hospital privileges or any other place you want to get credentialed, it will show up on your record. When you go to apply for malpractice insurance with any future carriers, you’ll have to disclose any claims you’ve been involved in, so it will be reported there. Obviously, depending on the nature of the case, if it’s severe enough, if it’s bad enough, it could also get reported to the licensing board. So there are some potential repercussions there as well.

But generally speaking, it’s really more a matter of that black mark that you don’t necessarily want on your record if you don’t have to have it, because it could also then affect the cost of your premiums. Most carriers give doctors discounts for the number of years that they’ve gone without a loss against them. Well, if you have a payment made against you, whether it’s a settlement or an indemnity payment, obviously that means you’re not going to get that discount anymore, so your premium may go up.

Kevin Pho: So say a physician is presented with a malpractice insurance contract that has a weak consent to settle or doesn’t have one at all. What are the options as next steps?

Jennifer Wiggins: So my suggestion is, first and foremost, to do what you just said, which is to make sure you’re reading it. Make sure you know what the wiggle-room language is. If it says, “We’ll give you consent unless you leave,” then you may want to address that specifically with your administrator, whoever the hiring party is. Sometimes you can get something worked into your contract where you can get that reversed, but obviously that all needs to be put in writing. That’s why it’s incredibly important that you have these conversations before you sign your contract, because once you’ve signed it, you’ve given away all your power. So you need to be having these discussions before you accept a position, so that you can make any modifications that you might want to make.

If you find that it’s a consent provision that’s just terrible, or maybe you don’t have it at all, like we talked about in the article, there are other types of things like hammer clauses, which means if they offer consent and you say no, but then it pays, then you’re on the hook. So there are some really dangerous things you could get yourself into.

But if you find that you have one that you’re just completely uncomfortable with, you obviously could choose either to not practice there, or you could ask them, “Hey, can I just get my own malpractice insurance, one that I’m more comfortable with, but that you approve?” Obviously that would mean you would pay your own premium, but there could be several other benefits with that, meaning you have more control, and you get to go with the carrier you want to go with. It also would give you a policy with broader coverage, so you could have a policy that would cover you for other stuff you want to do on the side, so moonlighting or any supplemental work. So there could be a real benefit to that as well. Not every employer loves that option, but I would certainly bring it up if there’s something in that policy that’s of major concern to you.

Kevin Pho: When negotiating with employers, the standard line they give is that they have a standard contract and everyone just signs there. So for all these issues that you just brought up, in general, how much negotiation wiggle room is there, just from your experience talking to physicians in these positions?

Jennifer Wiggins: I think you have more control than you realize, because most, we’ll say hospitals in particular, most hospitals are very, very eager to hire new providers. So you do have quite a bit of leverage when it comes to dictating what you want. Now, obviously you don’t want to be unreasonable, because you’re looking for a great partner in the long run, and you do want to come in and be kind and generous and gracious. But if there are issues that are of importance to you, then the time to bring that up is at the time of signing. So you have more control than you think.

For example, I know that there are medical students who ask for their student loans to be paid off as part of the stipulation. If you’re not a new provider, maybe you’re transitioning from another practice and you’re moving into a hospital employment model, maybe you’ve got a tail bill from your old practice that you’ve got to pay. Let’s say it’s $30,000 of tail insurance you have to pay off. You could make that a term of your employment. You could say, “Hey, I’ll come work for you, but you’ve got to pay off this tail for me so I can get out.” So I would not hesitate in asking about any of those things that are of major concern to you, because you do have more control than you realize.

Kevin Pho: We’re talking to Jennifer Wiggins. She’s a medical malpractice insurance expert, and she wrote the KevinMD article “Understanding consent-to-settle in your malpractice insurance policy.”

Jennifer, I want to switch gears. A lot of my audience on KevinMD don’t just practice medicine. They have various proverbial side gigs, they have coaching practices, and of course, on KevinMD, I have my platform as well. In general, a lot of the questions I get are whether their current medical malpractice insurance policy covers what they’re doing outside of their clinical medicine practice. So can you speak to that, in terms of what additional precautions they should consider should they consider practice or activities outside their main clinical job?

Jennifer Wiggins: Sure. So when it comes to medical malpractice insurance, or professional liability in general, really it comes down to the type of work that you’re doing, and it obviously has to do with patient care. If you’re still within the realm of patient care, whether that’s coaching, maybe you’ve got a nutrition coaching business, or you’re still doing advice giving of some form, then you still have professional liability exposure. So you need to make sure you’ve got coverage for that, whether that’s included in your current policy or you get more of a general professional liability policy. You want to make sure you’re covered for that.

The other thing we’re seeing nowadays, obviously, is that everybody’s doing stuff online. You’ve got a website, you’re selling a course, you’re doing telemedicine-ish work; essentially, you’re giving advice virtually, right? So you also need to make sure that you’ve taken all the necessary precautions from a licensing perspective. Although you may not be practicing medicine in those states, there is some gray area as it relates to being a designated MD or a DO, or whatever your specialty designation is. You can still be perceived as giving advice, even if you’re not technically giving advice, just based on the fact that you’re a doctor. So obviously you need to make sure you’ve got the necessary licensing requirements for that as well.

Most malpractice insurance policies are written on a broad form, which means they cover you for everything you do unless it’s specifically excluded. So most of the time, if you’ve got a standard medical practice and then you do a little coaching on the side, your insurance is going to cover you for that, as long as you let the carrier know you’re doing it. Generally speaking, that’s covered. If you’re not doing anything in the standard practice of medicine anymore, and you’re just doing coaching, or you’re an online course creator, or whatever you’re doing now, then you might need something slightly different. Obviously, you don’t need the full-blown malpractice insurance policy anymore if you’re not practicing medicine. You could probably just get a professional liability policy of a different type that would be significantly cheaper, to just cover you for that.

Kevin Pho: And my final question: What are some of the take-home messages that you want to leave with the KevinMD audience?

Jennifer Wiggins: Yeah, I would just say, as it relates to malpractice insurance, don’t allow anybody, whether it’s your employer or anyone else, to dictate what’s right for you. There are a lot of resources now. Obviously, our agency focuses significant efforts on education. So make sure you understand what your options are. Are you better with an occurrence policy? Are you better with a claims-made policy? Make sure you really know what carriers are available in the marketplace. What’s the difference between a mutual insurance company and a stock company? Why would you pick one over the other?

So really make sure that you are your own advocate as it relates to malpractice insurance, and rely on experts like us to help you with that effort, because you have a lot going on already. Allowing somebody like an agent or a broker to really help you do the legwork, to keep yourself educated and aware of what’s happening in the marketplace, and to ensure that you’ve got the best coverage at the best price is going to be your best option going forward.

Kevin Pho: Jennifer, thank you so much for sharing your time and insight, and thanks again for being on the show.

Jennifer Wiggins: Thank you.