Yet another tail coverage question...

[leaverus]

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Seeking a little advice. Yes i realize you are not malpractice lawyers nor insurance underwriters, but many of you have far more experience and knowledge than i or have at least been in a similar position i think.

Anyway, i have been unemployed for several months w/o tail coverage. I was employed by my former group for nearly 3 years immediately after residency and had to leave for various reasons. i admit i was ignorant of liability insurance and never really gave any thought to tail (which per contract was my responsibility upon leaving the group) when i resigned. in addition, my former employer never forwarded me the letter from the insurance carrier giving me the option to buy tail coverage. meanwhile, i have been seeking employment for the past several months while bare and have been recently offered a position.

1) The tail will cost more than $40k. Obviously that's a lot of money and i can scrape it together if i absolutely have to but i would rather not. i had no adverse outcomes while with my former group and i believe the likelihood of litigation against is me is low, but i realize it's non-zero. do i still buy the tail?

2) i expect to start the new job within the next month or 2 once credentialing is processed. i haven't been formally offered a contract yet because i need to submit a pre-application with the credentialing office. would it be presumptuous of me to inquire what carrier the new group uses and whether they would be willing to cover my nose? actually i'm not even sure what happens if (or when) the credentialing office finds out i have no tail coverage. is it usual for hospitals to deny credentialing or the group to rescind their offer to such physicians? i have no problem continuing to go bare if they don't care.

 

[cincincyreds]

Seeking a little advice. Yes i realize you are not malpractice lawyers nor insurance underwriters, but many of you have far more experience and knowledge than i or have at least been in a similar position i think.

Anyway, i have been unemployed for several months w/o tail coverage. I was employed by my former group for nearly 3 years immediately after residency and had to leave for various reasons. i admit i was ignorant of liability insurance and never really gave any thought to tail (which per contract was my responsibility upon leaving the group) when i resigned. in addition, my former employer never forwarded me the letter from the insurance carrier giving me the option to buy tail coverage. meanwhile, i have been seeking employment for the past several months while bare and have been recently offered a position.

1) The tail will cost more than $40k. Obviously that's a lot of money and i can scrape it together if i absolutely have to but i would rather not. i had no adverse outcomes while with my former group and i believe the likelihood of litigation against is me is low, but i realize it's non-zero. do i still buy the tail?

2) i expect to start the new job within the next month or 2 once credentialing is processed. i haven't been formally offered a contract yet because i need to submit a pre-application with the credentialing office. would it be presumptuous of me to inquire what carrier the new group uses and whether they would be willing to cover my nose? actually i'm not even sure what happens if (or when) the credentialing office finds out i have no tail coverage. is it usual for hospitals to deny credentialing or the group to rescind their offer to such physicians? i have no problem continuing to go bare if they don't care.

Remember you can be sued for everything and you would want some lawyers on your side. What if unknown to you a patient you did 1 year and 11 months ago had an ulnar neve injury and is in the process of sueing you and you wouldn't even know it until you have been served the papers. Take my advice, you need to protect yourself. It may suck that you have to cough up 40k, but before you do that ask your new employer if they are willing to pay this tail, which by the way sounds really expensive. Maybe you could call the insurance company and ask if you could get last year's rate or a pretax amount to decrease the cost.

Remember you need to protect yourself.

 

[Oggg]

Is your new employer paying for your malpractice? If so, it's very reasonable to ask them who they use. If it's a similar policy, then you can ask them to start you at the established-physician rate (thus paying for a nose, which is usually cheaper than a tail). This will cost your employer a certain amount of money since they will be paying more for your malpractice for the first five years, but the cost is less than you paying a tail. You can offer to pay the nose yourself, unless your employer feels like giving you a free bonus.

I almost joined a place that had a totally different policy setup, and it wasn't the five year ramp up, so I would've had no choice but to pay a tail.

 

[cincincyreds]

Is your new employer paying for your malpractice? If so, it's very reasonable to ask them who they use. If it's a similar policy, then you can ask them to start you at the established-physician rate (thus paying for a nose, which is usually cheaper than a tail). This will cost your employer a certain amount of money since they will be paying more for your malpractice for the first five years, but the cost is less than you paying a tail. You can offer to pay the nose yourself, unless your employer feels like giving you a free bonus.

I almost joined a place that had a totally different policy setup, and it wasn't the five year ramp up, so I would've had no choice but to pay a tail.

What is nose coverage out of curiosity?

 

[imfrankie]

Not sure I would pay the tail.

 

[pgg]

Not sure I would pay the tail.

To be honest I'm not sure I would, either ...

But just because you had no adverse outcomes doesn't mean that a patient didn't drop dead from unrelated causes a day or two later. Did you do much OB? If someone's snowflake gets held back in 3rd grade because mom smoked crack while pregnant, will the OB and you and the hospital get sued? $40K will look like a bargain if that day comes, even if you fight and prevail in court.

Tail isn't just coverage for a judgment or settlement, it's lawyers and legal fees to defend or settle. A lack of (known) bad outcomes doesn't mean you won't get named in a frivolous suit.


Tail coverage isn't just free $ to your malpractice carrier. They've done the math and they set the price where it is because in the aggregate they've had to pay out claims made during the tail period. To an extent they're probably preying on everyone's fear to squeeze some extra money out of you.

What is nose coverage out of curiosity?

Nose is coverage you can get from your new carrier that will cover prior events. In essence it's tail coverage you get from your new carrier. It may or may not be a better deal.

 

[aneftp]

Not sure I would pay the tail.

I "nose/head" malpractice coverage usually is a partial coverage type of policy.

My sister got hit with a $40K malpractice tail when she didn't make partner (think about that if you are in a partnership track and group screws you and others).

Anyways she negotiated a "nose/head" coverage. So instead of 1/3 million coverage. She opted for nose coverage of 250/750K. Better than nothing. And she paid $10K instead of $40K full tail coverage.

So that would be a viable alternative for the OP since they don't they have had any adverse outcomes previously.

 

[leaverus]

To be honest I'm not sure I would, either ...

But just because you had no adverse outcomes doesn't mean that a patient didn't drop dead from unrelated causes a day or two later. Did you do much OB? If someone's snowflake gets held back in 3rd grade because mom smoked crack while pregnant, will the OB and you and the hospital get sued? $40K will look like a bargain if that day comes, even if you fight and prevail in court.

Tail isn't just coverage for a judgment or settlement, it's lawyers and legal fees to defend or settle. A lack of (known) bad outcomes doesn't mean you won't get named in a frivolous suit.


Tail coverage isn't just free $ to your malpractice carrier. They've done the math and they set the price where it is because in the aggregate they've had to pay out claims made during the tail period. To an extent they're probably preying on everyone's fear to squeeze some extra money out of you.

yes, i know all that now after doing my research. but like i said, i'm willing to take that risk personally IF future employers/hospitals do not care, otherwise i'd be glad to pay the tail. FWIW, i did OB (average amount, not a LOT), adult hearts and everything else except sick kids and heads. out of curiosity, you make a good argument in favor of getting the tail and yet you prefaced it with "not sure i'd buy the tail" - why?

and yes, the new employer will be paying the malpractice. is it reasonable for me to ask them to cover the nose? btw, it's generally said that nose coverage is cheaper than tail. anyone know ballpark just how much less it can be?

 

[leaverus]

Anyways she negotiated a "nose/head" coverage. So instead of 1/3 million coverage. She opted for nose coverage of 250/750K. Better than nothing. And she paid $10K instead of $40K full tail coverage.

hmmm...didn't know that was an option. i certainly wouldn't mind paying 10k for 250/750 - it'd let me rest a little easier.

 

[imfrankie]

I'd rather call every patient I took care of to say howdy-do, and and put my assets in safe harbor rather than get shaken down for a $40K tail

 

[pgg]

out of curiosity, you make a good argument in favor of getting the tail and yet you prefaced it with "not sure i'd buy the tail" - why?

I've had an individual policy for the 3 years I've been out of residency to cover my part-time moonlighting. In a couple years I'm very likely to move, and depending where I go I may or may not be able to keep that policy.

Like you I've had essentially no bad outcomes (that I'm aware of). One unexpected intraop death in an older cancer patient that turned out to be a big PE and nobody's fault; good interactions with family, who were grateful to everyone in the hospital. I don't do OB or hearts or heads, rare pediatrics under that policy. So I think at this point my risk of getting sued is awfully close to zero.

Still not sure what I'll do then.

 

[leaverus]

wait, so you have an individual policy in addition to your main employer's carrier?? does that cover only the moonlighting gigs or also your primary employment as well?

 

[pgg]

wait, so you have an individual policy in addition to your main employer's carrier?? does that cover only the moonlighting gigs or also your primary employment as well?

My primary employer is the military. My "carrier" with them is federal tort law. It's only when I work outside the Navy that I need my individual policy.

 

[Oggg]

If a surgeon Has a surgical complication and is sued for it, you can be included on the suit because your name was on the chart and you have deep pockets for them to go after.

 

[IlDestriero]

If a surgeon Has a surgical complication and is sued for it, you can be included on the suit because your name was on the chart and you have deep pockets for them to go after.

Yes, very true. One of my relatives is a radiologist, and even though they properly identified issues on the studies, they've been named in multiple malpractice suits when the surgeon or primary physician had a bad outcome. You need that tail to pay for the attorney to defend you from the shotgun lawsuit and cash grab when things go wrong. I would never go bare as a pediatric anesthesiologist. I wonder of my tail would be more expensive? Probably. Its not an issue I've had to face yet. One place covered the trail and my current insurance is occurrence.

 

[imfrankie]

If a surgeon Has a surgical complication and is sued for it, you can be included on the suit because your name was on the chart and you have deep pockets for them to go after.

If you have deep pockets. The deep pockets are the malpractice policies for folks that have protected assets.

 

[leaverus]

Define "surgical complication" Are you referring to problems that occur strictly in the immediate peri-operative period or does it include the entire surgical stay, ie. problems on the floor long after the surgery has taken place?

If i were doing only kids, the choice would be a no-brainer and i'd pay the tail without hesitating also. as it is, i've decided not to pay this tail - i cant afford it and i'm willing to chance it knowing my own history.

 

[IlDestriero]

Define "surgical complication" Are you referring to problems that occur strictly in the immediate peri-operative period or does it include the entire surgical stay, ie. problems on the floor long after the surgery has taken place?

If i were doing only kids, the choice would be a no-brainer and i'd pay the tail without hesitating also. as it is, i've decided not to pay this tail - i cant afford it and i'm willing to chance it knowing my own history.

It probably happens more than we know.

 

[sevoflurane]

I know it goes w/o saying, but when looking for a good gig, working in a tort reform state can make a difference with regards to asset protection. Even so... I have occurance based policy. It makes a huge difference when you first come out of residency. Your first gig will likely NOT be your last.

That being said... I feel your pain. Forking out 40K isn't as easy as it sounds. 😡

 

[sevoflurane]

Shait... what am I saying...

Forking out 40K doesn't sound easy at all... 😳

 

[lawyerdoctor]

I am an attorney as well as an anesthesiologist. It is terribly unfair, albeit common, for groups to try to put the cost of tail coverage on the employee. This is a meaningful issue as tail coverage can cost $65,000 in a high-litigation area of the country -- a huge obstacle to leaving a job if you must bear it. If I could instigate an insurrection, I would urge all my fellow anesthesiologists to insist on occurrence malpractice insurance (this covers all claims regardless of when they arise) or tail coverage on top of claims made insurance (claims made covers only claims that arise during the policy, so one must buy extended coverage for claims that are reported after the policy's end). Your employer probably collects about $500,000/year for your billings so there's plenty left over to pay the tail. Once trapped into purchasing one's own tail, try to get your next employer to buy prior acts coverage for you (possibly cheaper than the tail). I rather like the idea of the less expensive tail for lower coverage limits if you believe you're at low risk of claims arising. It's my recollection that most settlements and judgments against anesthesiologists run under $100,000 and few reach really big numbers, though legal counsel is expensive, as others here point out. Be aware that minors generally have until age 18 plus a few years to file malpractice lawsuits arising from injury during medical care so your OB work could conceivably come back to haunt you many years from now. It's sad for me to see that anesthesiologists are such easy marks in contract negotiation. Look favorably on employers that, on their own, offer occurrence insurance or tail. They are more honorable and are looking out for you.

 

[deleted126335]

I am an attorney as well as an anesthesiologist. It is terribly unfair, albeit common, for groups to try to put the cost of tail coverage on the employee. This is a meaningful issue as tail coverage can cost $65,000 in a high-litigation area of the country -- a huge obstacle to leaving a job if you must bear it. If I could instigate an insurrection, I would urge all my fellow anesthesiologists to insist on occurrence malpractice insurance (this covers all claims regardless of when they arise) or tail coverage on top of claims made insurance (claims made covers only claims that arise during the policy, so one must buy extended coverage for claims that are reported after the policy's end). Your employer probably collects about $500,000/year for your billings so there's plenty left over to pay the tail. Once trapped into purchasing one's own tail, try to get your next employer to buy prior acts coverage for you (possibly cheaper than the tail). I rather like the idea of the less expensive tail for lower coverage limits if you believe you're at low risk of claims arising. It's my recollection that most settlements and judgments against anesthesiologists run under $100,000 and few reach really big numbers, though legal counsel is expensive, as others here point out. Be aware that minors generally have until age 18 plus a few years to file malpractice lawsuits arising from injury during medical care so your OB work could conceivably come back to haunt you many years from now. It's sad for me to see that anesthesiologists are such easy marks in contract negotiation. Look favorably on employers that, on their own, offer occurrence insurance or tail. They are more honorable and are looking out for you.

I used to feel this way. Till I became a partner in the practice. Tails mature fairly quicky in my non tort reform state: about 2 years. We got stuck for the full tail (55K) on somebody who wasn't a good fit who left after this time. Now, new docs "earn" a tail, prorated over four years.

FYI claims made + buying tails is just plain cheaper than occurrence coverage over the long term. Not sure of the business reasons why this is true, but it is in our practice's experience.

 

[leaverus]

We got stuck for the full tail (55K) on somebody who wasn't a good fit who left after this time. Now, new docs "earn" a tail, prorated over four years.

Yeah, but that's still MUCH easier for a group to bear than for an individual. i assume that was an new grad? if they'd gotten "stuck" with the full 55k i think it probably woulda wiped 'em out. Maybe if i ever became partner i'd come around to your point of view but that loss meant what - no new car for you that year? What do you mean prorated - you split the cost of the tail for anyone who leaves prior to 4 years?

 

[aneftp]

I used to feel this way. Till I became a partner in the practice. Tails mature fairly quicky in my non tort reform state: about 2 years. We got stuck for the full tail (55K) on somebody who wasn't a good fit who left after this time. Now, new docs "earn" a tail, prorated over four years.

FYI claims made + buying tails is just plain cheaper than occurrence coverage over the long term. Not sure of the business reasons why this is true, but it is in our practice's experience.

Claims made are usually $3-5k (year one), 6-8k (year 2), 10-11k ( year 3), 12-13k (year 4), 14-16k ( year 5 maturity).

Tail is usually 2.5x lady years claim. So if year 5 is. $15k claims. Tail will be around 35-37k.

Occurrence is around $15-20k per year straight up. It may decline a little bit also each base on ur clean record. I started at $21 k occurrence in 2008. Now my policy is less than $13k with credits.

Just do the math. The overall money is the same occurrence vs claims when final tail is made. So groups who have a long partnership track rip new grads off if they don't offer a fair tail.

It doesn't take a rocket scientist to figure out there are shady groups who don't intend to make many new grads partners. If they don't offer a fair tail policy if you don't become partner. Stay away. By fair I mean if new person wants to leave after one year than new person pays their own tail. If after 2-4 year person doesn't become partner than group needs to pay the tail. Seriously you know if someone is good fit after a couple of months.

If you intend to use them for 2-4 years and all of sudden say they are not a good fit....that's not believable.

 

[leaverus]

If you intend to use them for 2-4 years and all of sudden say they are not a good fit....that's not believable.

Yes, i made a huge mistake coming out of residency and was just plain uninformed about liability insurance. If i had armed myself with the proper knowledge back then, i would have had the clause in my contract changed to say that the group would pay the tail.

 

[deleted126335]

Yeah, but that's still MUCH easier for a group to bear than for an individual. i assume that was an new grad? if they'd gotten "stuck" with the full 55k i think it probably woulda wiped 'em out. Maybe if i ever became partner i'd come around to your point of view but that loss meant what - no new car for you that year? What do you mean prorated - you split the cost of the tail for anyone who leaves prior to 4 years?

Pro rated: 1 year he would have earned 25%, 2 years 50% etc.
No apologies. We are completely upfront about the policy with new hires. This doc was hired on a non partnership track. There has never been a doc in the last 15 years in my group who started on a partnership track that wasn't offered partnership.

 

[Metalblade]

I have one colleague who had frivolous lawsuits brought against him. He used to work in a low income area , ie "the hood", where everyone was looking for a winning lottery ticket. It was stupid stuff like "I have asthma now because you did an interscalene block on me". None of it sticks, but I'm assuming there is some cost to it, and you probably need insurance to cover it.

And if you did OB or peds, the statute of limitations is longer. I think it's until the kid is 18, but I'm not sure.

If you're not going to get the tail, if you buy a house, do it under your wife's name, and funnel spare cash into trusts, retirement accounts, life insurance, etc.

Also, some hospitals will require evidence of tail coverage before credentialing you. So will insurance companies. You might not be able to beat that one.

Tough decision. Good luck.