Often physicians serve as directors of surgery centers, assisted living facilities, nursing homes, hospital divisions and other medical facilities. They may receive payment, and enjoy the prestige that comes with serving on a board. Their responsibilities as medical directors vary depending on the type of facility for which they serve.
At a hospital, a medical director may be involved in credentialing and establishing practice protocols. For a nursing home or assisted living facility, medical directors may be responsible for patient care, credentialing, setting protocols and the hiring and firing of ancillaries. Whether or not these responsibilities are outlined in the agreement between the physician and the institution, they may be implied simply by having the “medical director” title. This, of course, leaves physicians at risk for potential claims from disgruntled patients, employees and even their employers.
Making sure medical directors have the right coverage is important to protect their individual assets and that of the facility. Patient care is usually covered under professional liability/medical malpractice insurance unless there is a specific exclusion, which needs to be carefully reviewed to determine whether it covers physicians in their capacity as medical directors. Setting protocols, hiring and firing are not medical professional liability exposures and would not be typically covered. These types of exposures require Directors & Officers (D&O) insurance.
Just take a look at what happened in a recent lawsuit involving a surgical group with a separately incorporated outpatient surgery center. A patient sued the center over its care. One of the group’s members, who was not involved in this patient’s care, was named in the lawsuit in his capacity as the medical director. His professional liability insurance did not pay the claim because the physician’s position as the medical director was not covered by the policy. In this case, to assure that this exposure was covered, one had to secure medical malpractice insurance that includes protection for those acting as medical directors or have a D&O policy in place.
D&O insurance is important to cover many other exposures for medical directors as we mentioned earlier, including issues involving employment practices, such as allegations of discrimination, sexual harassment, and wrongful termination. There is also the fallout from cyber incidents that can affect a medical director of a healthcare facility in the event of a breach. In addition, it’s important that the D&O coverage is specifically tailored for the healthcare organization and its directors to cover unique exposures. For example, a standard D&O insurance policy does not adequately provide coverage for HIPAA violations for a number of reasons. A healthcare organization-specific D&O insurance policy can be secured with specific coverage for HIPAA violations.
Caitlin Morgan specializes in securing D&O insurance, including for nursing homes, assisted living facilities, independent living facilities, and medical facilities. We can help you protect the organization and its directors. Give us a call at 877.226.1027.