Must-Haves in Your Urgent Care Practice Insurance

With the recent explosion of thousands of new urgent care centers (UCCs), it’s important to make sure that the business has the necessary insurance coverage.

Douglas Grimm, Health Care Chair at Stradley Ronon Stevens & Young, LLP, says that there are three must-haves in urgent care practice insurance: general liability, directors and officers (D&O) and medical malpractice.

“These types of insurance will cover your general business needs, as well as the needs that are related to the care of patients,” Grimm says.

According to Grimm, general liability insurance will cover general issues related to the operation of a business, as well as unforeseen events such as slips and falls. D&O insurance is for the directors and officers of the company to the extent that they are sued for things that they do while acting in their official capacity as a director or officer of the UCC.

“If you were the chief executive officer of an urgent care center, something bad happened to a patient while they were waiting to be seen, and they sued the company and you because you’re the CEO, D&O insurance will cover your legal expenses provided that you were acting as the CEO during the time that the incident happened,” Grimm explains. He also stresses that it’s important to make sure the D&O insurance covers the medical director of the center, as medical directors are generally contracted to the center.

Grimm says that physicians and any healthcare professionals working inside the urgent care center must have medical malpractice insurance.

“Mid-level practitioners, such as nurse practitioners, need insurance as well, since they can practice relatively independent of a physician,” Grimm adds.

Matthew Friendly, Associate at McDermott Will & Emery LLP, also stresses that you must have medical malpractice and general liability insurance.

“Events may happen outside of your control that can lead to litigation,” Friendly says. “Medical malpractice and general liability insurance are methods to manage the risk of expensive litigation.”

Grimm says that the ways the policies are structured will vary.

“Urgent care centers will normally provide insurance for its physicians,” Grimm says. “But there are always exceptions to the rule.”

urgent care center insurance must-havesUCCs can also choose policies from one company, or shop around for different policies from different companies. There are pros and cons to each method.

“The insurance market is competitive, so it is wise to shop around and obtain favorable rates, whether ultimately deciding on one carrier or multiple carriers,” Friendly says. “However, centers also need to make sure that they are obtaining the appropriate levels of coverage to meet their business needs and contractual arrangements.”

“Insurance companies will be happy to sell you insurance, and you’ll probably get a better price if you consolidate all of your needs with a single company, but there’s no requirement to do so,” Grimm says. “You could get a general liability policy from one company, and a medical malpractice policy from another, but maintaining policies from multiple companies can be an administrative nightmare.”

Cody Vicknair, Area Assistant Vice President at Arthur J. Gallagher & Co., advises that centers should consolidate their policies.

“It’s highly recommended that your urgent care center’s malpractice insurance policy is written with the same carrier who writes the general liability coverage policy,” Vicknair says. “Sometimes the cause of an incident is hard to discern, and if both policies are with the same carrier, they’re not pointing fingers at each other when a claim is made.”

Friendly also says it’s important to consider any requirements that a center may have under other contractual arrangements, particularly third party payors.

“Commercial payors may have provisions in their contracts requiring certain limits of coverage,” Friendly says. “Non-compliance with payor contracts can put these contractual relationships at risk and may jeopardize your reimbursement.”

In addition to general liability, D&O and medical malpractice insurance, Grimm suggests two other types of insurance to consider: cyber insurance covering data theft or data loss, and regulatory insurance.

“Cyber insurance will protect against the fines and penalties associated with patient information privacy and security breaches,” Grimm says. “However, there are two levels of coverage that you should be concerned with: coverage for information breaches under federal law, and coverage for information breaches under state law.”

Grimm stresses the importance of understanding the level of coverage you will get at both the federal and state level.

“HIPAA is a federal law, and if patient information is breached, all the federal government can do is fine or penalize the UCC for the breach,” Grimm says. “However, state laws may allow patients to sue you directly if the breached information is damaging.”

Grimm says that larger, more sophisticated urgent care centers should consider regulatory insurance.

“In the event of an investigation by the Department of Justice (DOJ) or the Office of the Inspector General (OIG), regulatory insurance can help offset the cost of legal fees, fines and penalties,” Grimm says.

Recovery Audit Contractors (RACs) can also investigate your urgent care center. To protect your center, RAC insurance is generally included as part of regulatory insurance.

“There are laws regarding what RACs can and cannot do, and what is reasonable and what is unreasonable,” Grimm says.  “RAC insurance can help also help reimburse legal fees.”

Vicknair also suggests obtaining a business owner’s insurance policy that includes business personal property and business operations.

“This will cover common exposures such as fire, business interruption, theft, HNO and EPLI. Depending on the clinic’s location, policies may extend to include wind and hail as well,” Vicknair says. “You might even be able to have it include Cyber and Regulatory Coverage of electronic medical records, instead of having to purchase a separate cyber insurance policy.”

If you have multiple urgent care centers in multiple states, that’s nothing to worry about. Coverage isn’t geographically limited.

“As long as the insurance company is licensed to sell insurance, then there’s no problem,” Grimm says. “And most big insurance companies will be licensed in all 50 states, so finding one company to consolidate all of your policies won’t be difficult.”

Before you rush off and buy all kinds of insurance, Grimm advises that UCC owners should evaluate certain aspects of their center.

“What kinds of operations are you running, what kinds of doctors do you have working there, what are your hours of operation and what kind of patients are you seeing?” Grimm asks. “How complex are you? Are you seeing gunshot wounds or cuts and scrapes? These are all kinds of characteristics that you must take into account to ensure that you get the appropriate coverage.”

“There are a large number of policies out there, but there’s certainly not a ‘one-size-fits-all’ policy that centers should obtain,” Friendly says. “There are a plethora of factors and options that should be considered.”

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