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AHLA Seeks Clarification on Malpractice Insurance
Proper malpractice coverage is essential to any physician's practice. When that coverage is not readily available or premiums skyrocket, that essential can seem like a luxury. Physicians facing other economic pressures in their practice not infrequently opt to reduce their insurance limits, increase their deductible, drop their coverage altogether, retire or leave the area, or discontinue what they view as high-risk portions of their practice (eg, serving on ER call rosters or accepting Medicaid or indigent patients). As a result, physicians' personal assets (and careers) are more at risk, hospitals face more liability exposure as the “deep pocket,” and patients face significantly reduced access to care.
To avoid those negative consequences, many physicians approach their hospitals for help. As with any problem, the possible solutions are varied, ranging from asking for a check for some part of the premiums to establishing an entire physician insurance program through an independent or hospital-owned insurer. Given the extensive federal regulation of hospital-physician relationships, however, these solutions can raise different problems under the Stark Law, the Medicare and Medicaid Anti-kickback Statute and the inurement, private benefit and excess benefit rules as described below. The consequences of running afoul of those laws can include significant financial penalties, exclusion from Medicare and Medicaid and, for nonprofits, loss of tax-exempt status. At the same time, however, the parameters of what assistance is permitted, and under what conditions, are the subject of some confusion among providers.
AHLA's Request
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