There are several reasons why this is a problem of a corporate group and is unlikely to become a problem from a democratic group.
The CMG has enough size that they can create their own insurance subsidiary. Very few private groups can do this. PhyAmerica did not properly fund their insurance subsidiary...actually they underfunded it by around 90+%.
So, over 200 docs are now in a situation where they have open claims against them and the insurance subsidiary will go bankrupt after one or two large judgments. All the other docs are potentially liable for their personal assets for settlements or jury verdicts, and may have to pay legal fees (lots of money) out of their pocket. They are being pressured to settle frivolous lawsuits to make the problem go away, but this will make it more difficult and expensive for them to get medmal insurance in the future.
If a democratic group were large enough to create its own insurance subsidiary, they would not choose to way underfund it, because the physician-owners would be screwing themselves. But, the CMG executives (and shareholders in certain firms) do not have any disincentive to screw their physician-employees in terms of medmal. In this case, dozens of physician-employees wrote letters to Phyamerica and the insurance subsidiary and were assured that the insurance subsidiary was fully funded, which of course was not true. but then again, this is the same group of people that gave themselves several hundred thousand dollar bonuses a few days before they declared bankruptcy.
The physician-employees couldn't have done anything to prevent their situation except for not working for PhyAmerica. Since they have no real access to the insurance info earlier, they couldn't have known how they were getting screwed. Remember, physicians working for CMGS, can't even see what is billed in their own name, despite being on the hook for any overbilling by the CMG. Compare this to a democratic gorup, where everyone can see the books and everyone has a vote in the decision for how to take care of these management and financial issues.
AAEM is expending significant resources to help out these PhyAmerica (now Sterling) docs. In addition, the entire AAEM Board has volunteered to serve as an expert witness, free of charge, for any of these 200+ pending cases. Of course, AAEM continues to work to prevent these abuses from even happening.
Read more at
www.aaem.org,
www.aaemres.org, and in Common Sense.
I'll write up a synopsis on the issue sometime this month and post it under AAEM Topics on the AAEM Discussion Forums.
Take care,
Mark Reiter MD MBA
UNC EM
President-Elect, AAEM Resident and Student Association