13 FAQs About Surgery Center Insurance Coverage

I. David Gordon, president and founder of Gordon Companies, which provides a variety of services covering all aspect of the Insurance market, identifies 13 frequently asked questions ambulatory surgery centers ask relating to insurance coverage, explains why they are important questions for which to have answers, and identifies other related questions ASCs will need to have the answers for.


1. What is my insurance company's "rating"?

I. David Gordon: Knowing your company's A.M Best rating is essential when comparing insurance companies. The higher the rating, the greater the financial stability. You want a company that will be around well after your policy expires. Who else will pay for claims if not them?


2. Who are the attorneys that will represent me in the event of a negligence claim against me? Do they have experience in medical malpractice claims?

IDG: The ability to have an experienced medical malpractice attorney shouldn't be a luxury when you're the client. When it's your license and reputation on the line, you want someone with the proper knowledge. Not a workers' compensation or Directors & Officers insurance specialist. Who will represent you?


3. Does my opinion matter when deciding whether or not a claim is settled pre-trial?

IDG: Again, when dealing with your claim, your opinion should always be taken into account. The decision whether or not to settle affects you just as much at the insurer. Making sure that you are an integral part of the process is critical when your business is on the line. Are you being heard?


4. Will my insurance company assist in risk management and quality assurance?

IDG: Having the support of experienced risk management is a key part of staying clear of any unexpected surprises and claims. Remaining claim-free means lower premiums. Does your insurance company actively try to ensure that you are taking necessary precautions to avoid errors and reduce risks?


5. How do I know how much property coverage I need?

IDG: Underinsurance is one of the biggest problems in the industry today. Annual reviews and coverage alterations should be a priority. How much would it cost to replace your building, contents, improvements and medical equipment? How do you replace your medical records? How do you reproduce your accounts receivable?


6. How much liability coverage do I need for asset protection?

IDG: There are some industry minimums. What limits of liability are required by vendors, Medicare, state licensing authorities? How do you calculate your coverage requirements on a cost/benefit bases? Are your assets protected? Many ASC owners consult local defense attorneys for input on this question. They then evaluate cost/benefit measures to reach a business decision.


7. Who can be sued?

IDG: In short, everyone. In America today claimants try their best to bring in as many "negligent parties" into the suit as they can. Potential defendants include the operating entity, the physicians, technical staff, clerical staff and billing staff. Plaintiff attorneys usually include any potential defendants.


8. Do I need a company that specializes in insuring healthcare exposures?

IDG: Like anything in business, specialties are vital. A company should always be able to closely relate to its clientele. Would you go to a hardware store for a stomach problem?


9. Is it better to divide my risk amongst a few insurance companies or group everything with one company that specializes in healthcare?

IDG: The insurance industry agrees with physicists when they say "nothing exists in a vacuum." It is important to understand how a single claim can affect different parts of your policy. What are the ripple effects of this claim? What benefits are derived when coverages are combined in one company?


10. Should the size of my center matter when choosing an insurance carrier?

IDG: Whether large or small you want to make sure that your insurance provider is equipped to deal with your specific needs. Are there certain companies that are better equipped to help your large center? Is there a company where your small center will receive the same attention as a larger company? ASC exposures appear to be similar to other medical practices. Only a skilled underwriter will understand the complex business arrangements and contractual relationships in the ASC business model.


11. Do I need business interruption coverage?

IDG: When a blizzard or boiler problem closes your center and appointments are being cancelled, you are no longer able to practice due to the fact your credentials are location specific. Can you afford to be out of work for this time?


12. I've read a little bit about cyber liability. Is that something I need?

IDG: With new government mandated regulations, information must be kept electronically. Consequently, new liability risks arise from the vulnerability of cyber space. Are you protected?


13. What other coverages are important for me to know about?

IDG: Most ASCs are of mixed ownership and management. Therefore, it is critically important to maintain adequate Directors & Officers and Employment Practices Liability coverages to address hiring and firing issues and the selection of owner partners and termination of owner parties. These arrangements have become targets of plaintiff attorneys.


Learn more about Gordon Companies at http://gordoncompanies.com.

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