Insurance Update - RISKY BUSINESS - Practicing with Uninsured Physicians

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Insurance Update - RISKY BUSINESS - Practicing with Uninsured Physicians

By Cliff Rapp, LHRM, Vice President Risk Management

Under Florida law, physicians that fail to carry malpractice insurance must post a notice to their patients that they are uninsured, or "Bare." However, statutes do not compel that any form of notice be given to ones' colleagues. Commonly it is not until a claim arises that a colleague’s lack of insurance is disclosed. Not until then does the impact to those who are insured become painfully apparent – often in tandem with the plaintiff’s theory of liability.

In a recent case, our insured oncologist was sued for an alleged failure to diagnose cervical cancer that was missed by the patient’s gynecologist, who was uninsured. The gynecologist had referred the patient to our insured because of an abnormal PAP study. Our insured examined the patient and recommended appropriate diagnostic follow-up that was never pursued by the gynecologist. The thrust of the plaintiff’s case, however, was against our insured. Not surprisingly, the gynecologist took the position that our insured was at fault for failing to obtain the necessary diagnostic workup.

Practicing with those who are bare can and does increase your risk of being sued. Most physicians understand the term "deep pocket" in the context of malpractice – being targeted by one's insurance coverage instead of culpability. As in the case of our insured oncologist, plaintiff attorneys often direct their case of liability to where there is insurance coverage. When a bare physician is sued, it is almost a given that they will be approached by the plaintiff’s attorney with an offer of settlement at some point during the litigation. The attorney will usually offer the bare physician an offer of settlement whereby the plaintiff will not proceed with the case against the bare physician in exchange for the bare physician’s agreement to criticize the insured co-defendant physician in deposition or at trial. Refusing to do so subjects the bare physician to aggressive action by the plaintiff attorney and the potential for financial ruin.

The rising number of physicians electing to forego professional liability coverage increases your likelihood of participating in healthcare delivery with an uninsured colleague. New legislation designed to enforce financial responsibility of bare practitioners is unlikely to have any direct effect in terms of the risk of being sued. The fact of the matter is that an uninsured physician still faces the same chances of being sued as those who are insured. The issue for those insured is that of increased loss exposure. In terms of effective risk management, carefully consider the potential consequences of practicing along side those whose claim exposure you may ultimately be forced to underwrite.

Information in this article does not establish a standard of care, nor is it a substitute for legal advice. The information and suggestions contained here are generalized and may not apply to all practice situations. FPIC recommends you obtain legal advice from a qualified attorney for a more specific application to your practice. This information should be used as a reference guide only.