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Four Reasons to Examine Your Healthcare Professional Liability Coverage

oswaldcompanies August 24, 2018

The Not So Secret Cause for Concern: Professional Liability 

Liability coverage for assisted living and skilled nursing providers has never been more important. As risk management partners for many healthcare providers, we are seeing claims arising from a variety of events, including but not limited to patient falls, delay in treatment, failure to follow physician orders, violation of resident rights, failure to address appropriate level of care and failure to treat and diagnose. In addition, the Plaintiff’s bar is becoming ever more creative and aggressive in finding ways to bring suits or actions against long term care owners and operators.

Cognizant of these exposures, we work with owners and operators to assist them in implementing or identifying areas of risk that can be mitigated or transferred. While each provider/organization is unique, from our vantage point, we have identified certain drivers for the escalation in numbers of claims (frequency), the increase in claims costs (severity), and the subsequent increased cost to transferring the risk of professional liability.

  • Staffing Shortages

As the economy booms and unemployment is low, numerous industries are experiencing a shortage in front line work force. Healthcare providers are especially pressed as this climate makes it more difficult to attract and retain qualified professional caregivers.

Staffing challenges result in care giver burnout which may lead to more patient incidents, lack of follow-through, poor documentation, or missed physician orders. These present an increased hazard for potential liability claims and also can create Workers Compensation issues.

  • Increased Reporting Requirements

The Affordable Care Act (ACA) imposed many employer requirements and while the ACA continues to evolve, Payroll Based Journal (PBJ) appears to remain. PBJ specifically impacts healthcare providers, as provides must account for and submit data to Centers for Medicare and Medicaid (CMS) regarding hours of care and staffing (full-time staff, as well as agency and contract staff). This administrative reporting to Medicare is putting more strain on an already lean administrative staff. More importantly PBJ provides self-reported documented proof of hours of care, and plaintiff attorneys are all over it. Further, PBJ reinforces the staffing quotient for STAR ratings*. As we have seen, as STAR ratings decrease, law suits increase. As an industry, self-reporting a short fall is asking for trouble. It has been reported 1,400 providers have lost a STAR rating since the PBJ reporting mandate.

*CMS created the Five-Star Quality Rating System to help consumers, their families, and caregivers compare skilled nursing facilities more easily and to help identify areas about which you may want to ask questions.

The Not So Secret Cause for Concern Professional Liability

  • Increased Acuity

There is no doubt that that the patients served today are more acute. Multiple diagnosis require higher levels of care. Further, Alzheimer’s dementia is growing at an alarming rate. The burden on care giving professionals has never been higher and the training required to properly care for this population is often over looked and/or learned on the job.

  • Claims Cost Continues to Increase

Media and industry associations are constantly shining a light on these issues. Occupancy challenges, staffing challenges and fiscal challenges are all factors considered by insurance carriers when analyzing future claims costs. The claims data is self-evident and the cost of defense continues to increase year over year. Awards are increasing and even those suits that are dismissed still incur significant defense costs. Insurance carriers are constantly reviewing their books of business looking to achieve profitability by tightening underwriting and reviewing rating.

Claims and CostsWe Can Help

Oswald understands the aging services business and the challenges the industry face. Our holistic risk management approach is designed to decrease loss while increasing operator profitability. We invest in the talent and technology to help you make data-driven decisions to protect your business. With Oswald as your partner, you will be fully equipped when it’s time to renew your professional liability coverage. We know the markets and the carriers and we’re eager to get to know you. Our ability to provide a clear positive depiction of your operation and negotiate terms and rates on our client’s behalf is just the tip of the iceberg. The work that goes on below sea level is what will set your organization up for future success.

To learn more about Insurance and Risk Management Needs for Senior Living, contact us here.