June 2005

Doctors still risk coverage by failure to report incidents to insurance company

by Timothy Feuling

In a recent CBS Report (www.cbsmalpractice.com), I discussed the situation where doctors, faced with patients who have registered complaints about their care, try to appease the patients by talking with them or offering them free care. Several recent cases have come to my attention recently that indicate the topic needs to be addressed again since it's becoming more and more of a problem in the chiropractic profession.

Many doctors are apparently reluctant to mention incidents like this to their insurance company. Perhaps they don't think anything will ever come of the complaints or that they risk having their premiums raised if they alert the company of any potential problems. But they risk a lot more by keeping silent ‑‑ they risk having their insurance coverage voided!

Insurance policies all contain provisions which require doctors to report incidents to them ‑‑ even before they turn into lawsuits or threats of lawsuits. An incident, also called a claim, is any demand for money, services or property naming the Insured and alleging a chiropractic incident.

If a patient comes in two days after an adjustment and says she's in more pain than she was before she saw you and thinks you should give her another adjustment for free ‑‑ or refund her money, etc. ‑‑ that demand (even if put into terms of a 'request') is legally a claim under the definitions used by most insurance companies.

If you shrug such as incident off and give the patient the extra free adjustment or the refund, you are in effect agreeing that your first adjustment caused her more pain. You were wrong and she was right, plain and simple. At least that's the way she and her attorney ‑‑ and very likely a judge or jury ‑‑ will interpret it. Picture the plaintiff's lawyer standing up in court and asking: "If you weren't guilty, why would you have given my client the money or services she demanded?" The plaintiff may even try to make it seem as though you were trying to bribe the patient into not suing you! You can't win.

Will every incident progress as far as a lawsuit? Absolutely not. But can you be sure which ones will just "go away" and which ones will end up in court? Of course not. No one can! So, every time you look the other way and hope for the best, you're risking your entire career and all your assets. If you are sued, the fact that you failed to notify your insurance company could mean you will not be covered for that case.

Some doctors think they can avoid the problem by having the complaining patient sign a release stating that, in exchange for the refund, the patient promises not to sue. Unfortunately, such a release probably won't legally bar the patient from filing a lawsuit and may be interpreted in court (with the help of the plaintiff's attorney) as your way of trying to intimidate or hush up the patient.

The solution is simple: file a report with your insurance company after any incident that might conceivably be considered a "claim" or "demand" by a patient. If your carrier feels that a refund as a gesture of goodwill is appropriate, they'll provide the proper forms. Do not agree to give any free services or refunds ‑‑ or in any other way comply with a patient demand or claim.

File a report even if you're not sure it is a "claim" or complaint. By reporting the incident, you also have a chance to speak with a claims adjuster (many of whom are attorneys) as a resource to discuss the specific patient situation.

The incident could simply remain "on file" with the carrier and nothing more will ever happen with it. But, if it does in the future turn into a full‑fledged demand or lawsuit, the insurer knows about it and will respond.

It's especially important to report incidents involving any associate doctors. If they leave you and don't maintain coverage, you could be left "holding the bag" ‑‑ or, rather, paying the claim!

Keep in mind, too, that all notes and correspondence to and from the insurance company should be kept in a separate personal insurance file ‑‑ not the patient's folders. Don't make any of these communications part of the patient's records, since that would make them available to the patients and their attorneys if the situation escalates to a lawsuit.

You want what's best for your patients. By protecting yourself from potential lawsuits, you'll make sure you're there to provide the best possible care for them.

-----

Typical insurance policy provisions covering reporting claims are similar to the following:

Your duties in the event of a claim

The Insured must give us written notice as soon as reasonably possible during your certificate period of any claim made against the Insured. We agree the Insured may have up to, but not to exceed, 60 days after the certificate period expiration to report to us a claim made against the Insured during your certificate period if the reporting of such claim is as soon as reasonably possible.

The Insured must:

a. immediately forward all documents received in connection with the claim to us;

b. fully cooperate with us or our designee in the investigation, the making of settlements, the conduct of civil proceedings, or enforcing any right of contribution or indemnity against another who may be liable to the Insured in connection with a claim;

c. attend depositions, hearings and trials;

d. assist in securing and giving evidence obtaining the attendance of witnesses; and

e. refuse, except at the Insured's own cost, to admit any liability, assume any damages, voluntarily make any payments, or incur any claim expenses.

Duties in the event of a potential claim

If, during your certificate period, the Insured becomes aware of a chiropractic incident that may reasonably be expected to be the basis of a claim against the Insured, the Insured must give written notice to us prior to the expiration of your certificate period. Such notice must state the reasons for anticipating a claim, with full particulars.