The recent changes to the U.S. health care system have caused shifts in liability trends and the general litigation environment in the medical world. Now that the Affordable Care Act (ACA) is in effect, risk managers in medical facilities can better understand the results of reform on their exposures.

Potential Increase in Malpractice Claims

According to a study conducted by the RAND Corporation, a nonprofit global policy think tank, medical malpractice claims could rise 5 percent due to the increased number of newly insured patients after the implementation of the ACA.

The potential rise in malpractice claims is not estimated to come from doctor error, but from an increased number of insured patients, which means a higher number of interactions and procedures and more opportunities for patients to sue.

However, some insurance experts do not agree with this hypothesis. Some believe that the newly insured patients’ gratitude for their previously absent care could make them reluctant to sue their doctors.

Impact on Non-physician Practitioners  

The influx of new patients increases the need for non-physician practitioners, such as physician assistants and nurse practitioners, and expands those practitioners’ responsibilities.

These expanded responsibilities could extend legal and regulatory accountability for these employees. Malpractice litigation involving nurse practitioners often focuses on their regulatory authority to practice certain types of patient care, and whether they are qualified to make medical decisions.

The issue of vicarious liability, which imposes responsibility on one person for the actions of another, is also a risk associated with non-physician practitioners. Doctors and hospitals will be more vulnerable to vicarious liability claims based on the actions or diagnoses of nurse practitioners who work under their supervision. The management structure at a hospital or private practice may need to shift to accommodate closer supervision or extended training to reduce these risks.

Health Care IT

Before the ACA, health care was one of the few industries that relied on paper records. One of the key features of the ACA is a move toward electronic health records (EHRs) as a way to reduce paperwork and administrative burdens.

The use of EHRs also lessens the risk of patient harm due to paperwork errors, which in turn lessens professional liability risk. EHRs allow better coordination of care—they make it easier for a patient’s health care providers to share relevant patient information.

But without proper training or implementation, incomplete or improperly entered EHRs could be used as ammunition by plaintiff attorneys in a malpractice case.

Another risk of EHRs is that storing information electronically carries the risk of a data breach, which could cause the loss of patients’ personal health information (PHI). Therefore, all PHI should be encrypted so that it remains secure when stored. 

Be Prepared for Changes

Prior to the ACA, the malpractice insurance environment was quite positive for health care providers. But with the potential increase in malpractice claims predicted by the RAND study, physicians could experience a higher liability premium.

A change in your facility’s exposures is not necessarily negative if you understand it and are able to ride it out strategically and successfully. In fact, if handled correctly, exposures resulting from the ACA could make your organization stronger.

Whatever the ultimate effects of the ACA on your professional liability exposures, Jimmy Porrello of Kaercher Insurance will be there to discuss which coverage is appropriate and how it needs to be built as a component of your comprehensive risk management program. Rely on Porrello to be your partner in effective risk management.

About Kaercher Insurance

Kaercher Insurance Brokerage, has for over 60 years provided risk management, and financial products and services to corporations, institutions and individuals throughout the world.