It is commonly known that physicians and surgeons are merging into larger groups in Florida. Some of these are single-specialty groups and some are multi-specialty. The driving force behind this trend is the desire to reduce expenses. Medical malpractice insurance is surely one of the largest expenses a group faces and should be addressed early to minimize problems.
When smaller practices merge into larger ones, it is not uncommon for doctors to then be insured by different medical malpractice insurance carriers. The group will undoubtedly move to one carrier, usually the one representing the larger entity. It is important for all physicians in a group to be insured by the same carrier, as the group will not want to negotiate among several insurers. This issue should be addressed before the merger takes place, so the new malpractice insurance coverage is active on the first day of operations. If the merging group has its own corporate coverage, it should be sure to maintain that coverage until accounts receivable are zeroed out and the corporations are closed.
In addition to ease of adjusting claims, there are other advantages for the group being insured by one medical malpractice insurance carrier:
- The cost per physician is usually less, as the group is usually able to negotiate credits;
- Physicians with prior medical malpractice claims may now be able to secure coverage from a standard carrier;
- The group can take advantage of free on-site risk management seminars and courses;
- Agents compete for group business, and can offer competitive bids.
It is very important for the group to be insured with a quality medical malpractice insurance company. We have seen too many cases where, in a desire to save premium, the group chooses a non-rated or poorly rated carrier, only to be disappointed with the claims handling later on. We believe that the company should be “A” rated by A.M. Best and Company, and focus solely on writing medical professional liability insurance for physicians and surgeons. Society credits, loss-free credits, risk management credits, and discretionary credits are usually available for quality risks. Some of the best medical malpractice insurance carriers offer dividend and other profit-sharing plans to secure new business and reward loyalty.
If the physician and surgeon group is working with an experienced medical malpractice insurance agent, that agent should be proactive in “shopping” the group’s insurance each year. In some cases, it will be best to stay with the same company—for a number of reasons. However, it has been our experience that everyone benefits with competition. In the end, the physician group receives the best possible price with the best possible company—a win for the doctor for sure.