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Understanding Hold-Harmless Managed Care Contract Clauses
[By Dr. Charles F. Fenton, III; JD]
Most doctors would not think of “practicing medicine bare”; yet perhaps the definition of this term should be re-framed?
Historical Definition
In the past, the term “practicing-bare” meant that a medical provider did not have malpractice insurance.
However, some current managed care contracts require that providers not only have certain limits of malpractice insurance coverage, but also furnish the company with evidence of same. Therefore, some of these providers are under the impression that they are not “practicing-bare.”
Hold Harmless Clauses
Unfortunately, most medical providers have no protection from adverse results arising out of a “Hold-Harmless” clause in a managed care contract or provider-agreement. And, most malpractice insurance companies do not provide such coverage.
So, if your malpractice insurance company does not provide coverage for such events, it is incumbent upon you and your associations to lobby malpractice insurance carriers to provide this coverage.
An additional rider, at an additional premium for Hold-Harmless coverage, would help the doctor sleep better at night.
Contract Considerations
The first question doctors should ask is: Would I consider practicing without malpractice insurance?
If the answer to this question is “no”, then the next question that should be asked is: “Why am I assuming the risk under the Hold Harmless Clause?”
If you cannot provide a lucent answer to this question (stating: “I have no choice,” is not a lucent answer!), then you should consider not signing the managed care contract.
Judgment Proof
Nonetheless, if a medical provider has signed a managed care contract, then they should understand that they are essentially practicing bare, and should take steps to reduce this exposure. In effect, the provider should attempt to become “judgment-proof.”
Such a step does present its own risks. Ultimately, the first step for every physician who signs a managed care contract, with hold harmless agreement, is to read the contract and then consult an attorney or other professional. Of late, plaintiff-attorneys are beginning to make inroads in suing managed care companies. The managed care attorneys foresaw such events and provided protection for the company in the contracts most providers have signed.
As your patients and other plaintiffs become successful in suing and recovering from managed care companies, those companies are going to seek indemnity from you; the provider. Unless you protect yourself, you are likely to become a collateral casualty to some degree or another.
The current practice of medicine presents may perils and risks to doctors and other providers. A doctor may not be able to insure against all these risks, and should take defensive steps to avoid future problems.
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- Dictionary of Health Economics and Finance
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- Dictionary of Health Insurance and Managed Care
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Filed under: Health Law & Policy, Insurance Matters, Professional Liability, Risk Management | Tagged: Managed Care, practicing bare | 3 Comments »
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