Tail coverage

[Phantom Spike]

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I performed a search on the forums and didn't find a thread that dealt with this in much detail, so I'm starting a new one.

This question is mainly directed towards clinicians in private practice and recent residency/fellowship graduates who are job-hunting right now: do most groups/employers pay the tail coverage with malpractice insurance? If they don't, should you reconsider joining them? And how much does the tail insurance generally come out to be for most specialties (in my case, neurology) for physicians who have been in private practice for a year or so?

Thanks in advance!

 

[docB]

Lots of groups will pay your tail, some won't and some have conditions (how's that for a useless answer?). Seriously, you have to look at a tail like any other benefit and try to figure out how much it means to your overall compensation package. For example, a group that offers pay x and a tail but no health coverage may be dollar for dollar the same as a group that offers pay x, healthcare but no tail. What I'm saying is that no tail may not be an automatic deal breaker. The conditions thing I mentioned applies to groups who demand that you work for them for some time period or otherwise fill some obligation before they'll pay your tail.

The way to figure this out is to find out how much a tail in your specialty, in your area would cost. That will help you to decide how much the tail is worth to you.

 

[njmedresident]

what is tail coverage?

 

[PediBoneDoc]

first off, to explain what tail coverage is. tail coverage is an extension of coverage when you change jobs and insurance companies or when you retire. it covers you for any malpractice occurrence during the time of coverage. it varies based on time in specialty and time in practice.

as far as who covers your tail when you leave, it should be spelled out in your contract. for small groups, usually you will have to cover your tail. for larger groups, they may share in your cost based on the length of time you where in practice. if you are hospital employee or university where they are self insured, they will probably cover the tail. this is usually and should be spelled out in your contract. it may even have a % of payment based on your years in the practice (this is very common).
1 year - you cover 100%; 2 years - you cover 80% etc.

 

[deleted87716]

Tail coverage is needed because of the statute of limitations on filing malpractice claims, typically seven years. Any time you retire or change malpractice carriers, you need to purchase tail coverage in the event you are later sued for something that happened during the time you were covered under your old policy. This usually amounts to tens of thousands of dollars.

 

[f_w]

If you change practices within a given insurance market, you can sometimes get something called 'nose' coverage. This means your new malpractice insurer includes your 'prior acts' into your new policy (and starting you of at a higher rung in the 'claims made' premium ladder). Often, this is cheaper than buying tail coverage from the prior insurer as the new guys are interested in getting your business.

 

[Phantom Spike]

If you change practices within a given insurance market, you can sometimes get something called 'nose' coverage. This means your new malpractice insurer includes your 'prior acts' into your new policy (and starting you of at a higher rung in the 'claims made' premium ladder). Often, this is cheaper than buying tail coverage from the prior insurer as the new guys are interested in getting your business.

From what I have been made to understand, though, nose coverage is much harder to get, since it's not offered by most carriers. Is that inaccurate?

 

[NinerNiner999]

Also, consider how long you will be with the group you join. Malpractice premiums start very low straight out of practice and typically increase in cost every year until the state's statue of limitations kicks in - usually 7-10 years, or in the case of OB, 18-21 years. The reason it starts out low is because as a new physician, you have not seen many patients. As the years go by, your patients seen increases and your tail does too.

Using EM as an example, where I am, my first year's tail is around $6000. Year two it will go up to $12000, then year 3 $18k, and so on. Fortunately, my group covers my tail 100% after three years (50% for the first two years), which means that should I decide to leave my group after 10 years, I won't be responsible for my 80k to 100k in tail payment, but if I leave within three years, I may have to pay $10k to leave...

 

[brc12]

There are generally 2 types of malpractice insurance. The first would be a "claims made" coverage which covers you at the type a malpractice claim is filed. Switching coverage/changing jobs etc is when you would need to pay for a tail. Your individual employment contract will specify how the tail payments are handled. At my prior job, my group would pay 100% of the tail only if I left after my initial 2 year contract. I left after 1.5 years and had a tail of $12900. Even if you are stuck with a tail, you may be able to negotiate with other employers for them to pay the tail for you, or reimburse your costs.
The other type of insurance would be "Occurence" insurance, which covers you at the time of the incident, whether or not you are still employed or covered at the time the actual claim is made. There would be no tail involved with this type of insurance.

 

[PediBoneDoc]

just a note, as far as the 2 insurance are concerned, and i may be proven wrong, there really is only the one type of insurance available "claims made". because of the malpractice issue, many insurance carriers do not offer the "occurrence" insurance anymore. i actually have not found a company that offers it yet.

and as far as the amount of tail, it varies based on the location, specialty, and years in practice. it is not uncommon for someone in a high risk specialty in a high malpractice area to receive a tail quote of 100,000+ dollars. the general rule is 150% of your actual yearly malpractice.

 

[Phantom Spike]

it is not uncommon for someone in a high risk specialty in a high malpractice area to receive a tail quote of 100,000+ dollars. the general rule is 150% of your actual yearly malpractice.

Is that usually a one-time payment that covers a certain number of years, or is that the amount you pay for every year you want the tail coverage to continue?

 

[deleted109597]

I recommend a "brazil cut" or larger. Anything less shows too much.

Wait, what are we talking about?

 

[PediBoneDoc]

Is that usually a one-time payment that covers a certain number of years, or is that the amount you pay for every year you want the tail coverage to continue?

usually a one time payment

 

[Samoa]

One nice thing about academia is that you can still get occurrance coverage. I don't know how common it is, but both my med school and my residency program (two different schools) have occurrence coverage.

In case it wasn't clear from the above posts, an occurrance policy covers you for any claim resulting from something that happened while you were employed by that company, even if the claim is made after you leave. It's very expensive.

 

[f_w]

From what I have been made to understand, though, nose coverage is much harder to get, since it's not offered by most carriers. Is that inaccurate?

That is correct, hence the 'you can sometimes get' sentence in my post.

To start with, the insurer you are switching to must be able to underwrite in the state you are moving from. So, most state specific mutual physicians insurers won't be able to do this. Also, this will only work if you have a clean malpractice history.