Radiology groups that are considering a teleradiology service should be aware that malpractice insurance is vastly different than malpractice insurance for an onsite, stationary physician group. Fortunately, the past few years have seen significant advances in the availability and cost reduction for teleradiology malpractice coverage.
However, it is still vital for a practice to obtain a "certificate of insurance" to ensure that the teleradiology exams will be covered in and from all states involved.
Some physician insurance companies that once opposed the practice of multistate teleradiology -- and refused to insure it -- will now provide coverage, albeit with certain restrictions. But more specialty insurers have entered the marketplace, thereby improving coverage options and availability. Teleradiology groups now have a wide variety of coverage options, from coverage for selected states to coverage for the entire U.S. and its territories. Coverage in foreign countries is also possible. Reading locations may be anywhere in the world if approved by the underwriting company.
Who needs to be covered?
Any teleradiology malpractice insurance program must insure the business entity and, ideally, all radiologists reading exams, regardless of whether they are employees or independent contractors.
With regard to independents, some teleradiology services rely on the contracted radiologists to provide their own individual malpractice insurance for teleradiology exams, but this sets up a potentially hazardous gap in coverage. The business entity should still carry its own teleradiology malpractice insurance.
For example, we have seen claims filed against an uninsured teleradiology service business. While the individual doctor did carry personal insurance, that company would not defend or pay claims for the teleradiology service entity.
Note that there is one downside to this double-coverage: There is always the chance an individual's insurance company and the entity's insurance company will attempt to put the weight of the claim on the other, which can result in a combative scenario instead of a strong defense.
The ideal situation is for the radiologists and teleradiology service to have the same insurer. If that is not possible, then in the event of a claim, the two companies should cooperate to reduce the impact of the claim.
Finally, insurance coverage must apply to all states where exams originate and the teleradiology service's state of domicile. Coverage also must apply to all types of exam reads -- nighthawk preliminary and final reads. Insurance is now readily available for final exams, even if all reads are finals.
How much will coverage cost?
Competition among insurance companies, and the continued excellent loss experience overall, has resulted in a reduction of total premiums and rates per read. Rates per read are now often less than $2.00 per exam although they can be much higher. The rate will depend upon several factors:
- The volume of reads
- The modalities used
- Whether the reads are preliminary or final
- The limits of liability, deductible, policy coverage form, loss experience
- The coverage territory
The minimum premium for group policies is typically between $20,000 to $30,000.
Liability limits of $2,000,000 per claim, and aggregates of $10 million and higher, are now available. Also, different levels of deductible options are now available. In the past, the minimum deductible was often between $10,000 and $25,000 per claim, and this remains the current rate for most group policies.
Individual radiologists may find no-deductible policies, or policies with a deductible of $1,000, depending on their state of residence and the states where their exams originate.
There are also deductible options, such as six-figure deductibles and self-insured retentions (SIRs) for those who are willing to retain a significant portion of the risk and reduce the pure insurance cost. Typically, six-figure deductibles and SIRs are only viable if the insurance premium is at least $500,000 and/or claim payments in the past five years have been significant.
Those with pure insurance premiums of $750,000 and higher may have options for alternative risk programs customized for their needs that have the potential to save 25% or more in premiums each year over a four- or five-year period. This type of program requires a long-term commitment to be practical.
Malpractice for individual radiologists, both full- and part-time, is now more readily available, especially if coverage is limited to selected states, and 50-state coverage is not required. We have seen individual policy premiums of $4,000 to $5,000 when the radiologist is only reading exams from one or two states; however, this should not be considered the norm.
What if a lawsuit is filed?
A common question is: What happens if the radiology group is named in a suit solely because they contracted with a teleradiology service and the teleradiology service read the exam in question?
Correct malpractice insurance for teleradiology will include coverage for the above situation, called "vicarious liability," or commonly known as "liability by agency."
If a suit is filed against the radiology group, hospital, or other imaging facility solely because the contracted teleradiology service read an exam, then the teleradiology service's malpractice insurance, if properly written, will provide "defense and indemnity" (claims payment) for those named in such a suit.
Some teleradiology services must also provide in-hospital practice to obtain the teleradiology contract. Full coverage for in-hospital radiology and teleradiology is available from a few carriers. "Automatic additional insured" endorsements for teleradiology clients and facilities are available from major carriers.
In summary, the majority of barriers to proper and affordable malpractice insurance have been overcome. However, the expertise of an insurance agent or broker familiar with teleradiology is still required to make certain that all options are explored and that the coverage does not leave any uninsured gaps.
In order to chose the right coverage, a teleradiology service should readily provide all insurance information required, and their insurance broker should be willing -- and able -- to discuss any issues with the group. Malpractice insurance for teleradiology, when written properly, can provide more than adequate protection.
By T. Lloyd Croft
AuntMinnie.com contributing writer
March 21, 2006
T. Lloyd Croft is a vice president of Professional Medical Insurance Services. He is based in Arlington Heights, IL.
Related Reading
Russian teleradiology network meets needs, exceeds expectations, March 6, 2006
Mammography CAD: Getting malpractice insurers on board, October 21, 2005
Medical malpractice legislation: An all-around non-starter?, July 8, 2004
Insurance 101: How to determine if a medical malpractice insurer is right for you, November 26, 2002
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