A Healthy Obsession with Chasing Tail

I’m frequently asked whether tail coverage for professional liability should be purchased. The doctor may be retiring. May be moving from state to another. Or just changing carriers.

The first question is whether tail coverage even applies. If you have what is known as an “occurrence” policy, tail coverage is already bundled in. In an occurrence policy, you are covered based on when the triggering event occurred. Hurray.

But, most policies sold today are not occurrence policies. The reason: They are more expensive.

Most policies sold are what is known as “claims made.” You are covered when the claim is reported (that is, when a lawsuit if filed and you file the claim with the carrier). Because there is typically a lag between the triggering medical event and the filing of a lawsuit, you need to have coverage for two events – the medical event and the lawsuit. So, here a tail policy would be relevant. The medical event has already occurred, but you do not know if and when a future lawsuit will be filed. With claims-made policies you would want tail coverage to address this future possibility.

I often hear this refrain.

“I don’t know of any patient who had a complication or injury. I feel pretty good about avoiding the cost of tail coverage. I don’t think I’ll ever be sued.”

My response typically is: How would you know? What about known unknowns? And unknown unknowns? What if you missed a diagnosis and the patient never returned? What if the patient followed up with another doctor and threw you under the bus? What if you accidentally left a sponge in the patient in spite of a normal sponge and needle count?

My point is YOU DON’T KNOW.

The benefit of tail coverage is that you are paying to mitigate the risk. Maybe you won’t be sued. Great. I never feel cheated with my life insurance policy if I don’t die. But if you do get sued, you’ll be glad you have the coverage.

I recently received a call from an internist who worked 20 hours a week at a prison. He also worked in private practice. He left the prison gig three years ago without purchasing tail coverage. A prisoner with nothing but time on his hands filed a lawsuit against the doctor. The doctor will likely prevail. But, he has to respond to the lawsuit. He does not want to risk a default judgment. So, now he’s paying out of pocket for an attorney to help. The attorney is hired is brilliant. But he’s got to be paid.

Finally, when you start a job with a group or hospital, clearly delineate who pays for tail coverage in the employment agreement. If the matter is left silent, at exit, fingers will be pointed. And that matter will be ripe for litigation. Address it up front.

In short, tail coverage is not a luxury. It’s a necessity for sleeping well at night.

What do you think?

By | 2017-07-14T11:14:02+00:00 November 4th, 2016|News|9 Comments

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  1. John Harvey November 4, 2016 at 6:26 pm - Reply

    Purchasing tail coverage will help you sleep at night. If you can afford the coverage, puchase the coverage. You never know when you might need the coverage.

  2. David Lippman November 4, 2016 at 7:35 pm - Reply

    I had negotiated full tail coverage with my prior employer. I know of another physician who didn’t negotiate and had to pay half the tail which was close to 20 grand if my recollection is correct. It seems the tail is often 2-3 times the premium. Lastly, she had to pay for it in 30 days. That can cause a cash crunch if one is not careful. I think she purchased it but just be aware not only of the cost but of the timeframe in which it needs to be purchased.

  3. Tammy November 4, 2016 at 7:36 pm - Reply

    Yuppers. I was sued after stopping conservative care podiatry practice. Tail coverage was way out of reach financially. 6 months after ending practice I was sued for a patient whom I wrote in his chart that he was a surgical patient of a specific surgical podiatrist with whom he is being followed. I did take a pulse on the unwrapped foot, which was unremarkable besides a healed tma. I didn’t remove the surgical dressing, which was clean and dry. I did note that as a consult for onychomycosis, it was not possible for me to see him because he did not possess the body part for which I have been consulted, as he had no toes and therefore no toenails. Apparently the surgery was limb salvage and failed as I learned was expected. Patient and family had been extensively counseled about risk. The surgeon wasn’t sued. I was after patient died, as part of the facility and my note. I paid $2000. 00 for an attorney to write a letter explaining that this was not my patient. Attorney kept me in. All the way to mediation, about 3 years. Attorney claimed that I performed vascular procedure because I took one pulse. I disputed his claim and made him look like a lunatic. I believe that I was able to significantly reduce the award that was settled. I refused to settle and said I am preparing to countersue for abuse of process. The other attorneys thanked me for my input regarding limb salvage. Still, a patient who had an expected outcome winds up causing a windfall for a largely uninvolved relative. I learned a great deal in the process. I was the first to be let out of the case. The whole process is crooked beyond belief. If you can afford tail, get it. If I can be stuck in a lawsuit for 3 years for a person who is not my patient, I can’t imagine how long I would have been involved if it were my patient.

  4. Bob November 5, 2016 at 9:54 am - Reply

    You need a tail. PERIOD!!

  5. Anon November 5, 2016 at 11:28 am - Reply

    Hopefully I can afford keeping our occurrence policies we’ve had from the beginning. Claims-made policies suck, but are cheaper and available from more carriers. Excellent post on this most important topic!

  6. Ziga Tretjak, MD November 5, 2016 at 12:23 pm - Reply

    Appreciate you covering this vital topic. Thanks to good comments a well

  7. john November 5, 2016 at 4:50 pm - Reply

    I switched jobs and states with a contract which included the new company paying my tail. I retained a fax showing when I had turned in the bill for the tail coverage and was assured all was done. This was good until 3 months later I got a request for records and promptly turned it over to the previous malpractice insurer who assured me no one had purchased a tail. Five years later, the new company would only “indemnify” me up to 1M subtracting legal fees and with settling, at 1M settlement, I was out about 250k- hard to write that check. In a do over, when I got a second notice for cost of tail, I should have paid that immediately out of my funds to assure it was not lost in the megacorp. As Bob says above “you need it” Period

  8. Michael M. Rosenblatt, DPM November 6, 2016 at 4:52 pm - Reply

    Many physicians have now joined “corporate” American-medicine. They were “convinced” that the promised paycheck would be a safe harbor from the necessity of finding an office, paying employees, rent and the telephone bill. It was supposed to be an “easy ride.”

    Problems occur however when your employer reduces your pay by 1/3rd, even though you are seeing more patients. You assume that it’s just corporate greed. It might also be that insurers are not paying what they used to and corporate office staff is not particularly interested in “going to bat for you to get the money.” After all, they don’t even know who you are.

    You sue for failure to pay according to your contract. They respond with a departmental complaint against you for 2 patients who died under your care. It’s obvious sham-peer review. But there is still a strong likelihood that you will get Data Banked if you try to fight it. (Sham peer review has become the primary method for hospitals/group practices to get you “separated.”)

    You separate. Your department head “assures” you that tail coverage is part of your contract. Problem is, he/she doesn’t explain this to the hospital CEO, who REFUSES to sign the check to the insurer. You think you are covered. Months roll by. You are not covered and have no idea that you are not.

    Some things are worth paying for yourself. This is one of them. You need a dated face-sheet from an insurer defining your tail coverage. Unless you have that in your desk or safe-deposit drawer, you don’t have it.

    The nice, friendly dinner parties you attended courtesy of your previous employer are ancient history. You are their new enemy. When you partner with corporate America you must expect them to push you under the bus. That’s the way it is.

    Michael M. Rosenblatt, DPM

  9. Erik Nuveen November 7, 2016 at 9:48 am - Reply

    Patients and their plaintiffs attorneys are literally waiting for the day physicians retire in order to file capricious suits, “daylight robbery”. They file in order to extort money without cause, through financial duress. They sue for $150,000 in order to force a settlement. And they will not stop until funds are paid. If their is a deductible they will target that number as their goal. “It’s just business, it’s not personal”

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