Who Can I Talk To?

By Kimberly Wittchow, JD, OMIC Staff Attorney

Sometimes it can be confusing, even with a small personalized insurance company, to know whom to call when you have questions. Your policy provides various benefits and imposes certain duties all requiring some type of notification. This article is designed to lead you easily to the right contact person or department to meet your needs.

Coverage Questions

Underwriting is the department that issues OMIC’s policies. Underwriters are the experts to notify when you have a change in business practices or procedures performed or if you have questions regarding the scope of your coverage. They can guide you in modifying your coverage when you add or remove a partner or employee, and when you leave practice, they can discuss your options for continued coverage for not-yet-reported claims and how and when to terminate your policy. If you have an incident that affects your ability to practice or may impact your licensure, such as a disabling injury or illness or loss of privileges at a licensed health care facility, you will need to let your underwriter know. (Your policy provides that practice changes and personal incidents must be reported within 30 days of their occurrence.) Underwriters and their assistants are assigned to specific territories. Therefore, you will want to discuss your issues with your personal underwriter or assistant.

Insureds sometimes sign agreements that contain provisions requiring them to carry insurance at certain limits with certain provisions. Other contracts may indemnify the insured or require the insured to indemnify the other party. While your personal attorney should advise you on any agreements you enter into, you may also want to ask your underwriter how such a provision could affect your coverage. He or she will review that section of the contract with OMIC’s in-house legal staff and give you their input.

Certificates of Insurance and Claims Reports insureds often need to supply proof of their coverage to hospitals where they have privileges. They also may need to present evidence of their claims experience. OMIC employs underwriting clerks to handle these requests. Requests can be made via OMIC’s web site, fax, email or telephone.

Confidential Risk Management

The Risk Management hotline is available for any insured to call and discuss issues of concern in a confidential forum. A specialist is on call each day during OMIC’s business hours to attend to physicians in need of advice. The queries can be general in nature, about, for example, best practices in documentation, telephone screening, or ROP screening. They can also be specific to an incident that has just occurred. For instance, an insured may have experienced a maloccurrence and want advice on the best way to discuss the outcome with the patient. The risk manager will discuss ideas and options with the insured but will not communicate this occurrence to OMIC’s underwriting or claims departments.

Reporting Incidents and Claims

However, when an incident has occurred that the insured believes is likely to result in a claim, he or she must report the occurrence to the claims department in order to trigger coverage. Indications of a potential claim include threats or statements from the patient about suing the doctor. Records requests that follow maloccurrences may also indicate a potential claim. Actual claims, in the form of requests for indemnity made by the patient or his or her attorney or lawsuits filed, must be reported immediately. In addition to claims coverage, insureds also have an additional benefit providing $25,000 for the legal defense of any investigation or proceeding by a medical board arising from a patient complaint about the insured’s direct patient treatment. This should also be reported to the insured’s claims representative for prompt action. Because every jurisdiction has different laws and administrative requirements, claims representatives, like underwriters, are each responsible for different territories. Therefore, you will want to speak to your assigned claims representative about your potential or actual claim.

Payment Questions

Occasionally insureds have questions about their bills. They might need a breakdown of how the premium has been calculated or to inquire if a bill they paid has been received. If you have specific questions regarding your premium calculation, for instance, whether certain discounts have been applied, they should be directed to your underwriter. For more general information regarding your account, such as when your payment is due or the amount owed, OMIC’s accounting department can assist you.

Risk Management Courses

One of OMIC’s most valuable member benefit is its ophthalmic-specific risk management program. More than 2,400 insureds per year participate in an online, live, or CD course. OMIC’s risk management coordinator is happy to assist you in learning more or signing up for a current course offering. For inquiries about risk management discounts as applied to your account, contact your underwriter.

To reach any of these departments, please call OMIC toll free at (800) 562-6642 and follow the prompts or press 0 for the operator.

Coverage for Optometrists

By Kimberly Wynkoop

OMIC Legal Counsel

Digest, Summer 2010

OMIC’s mission and value commitment are to meet the specific insurance needs of the changing ophthalmic practice of members of the American Academy of Ophthalmology. Academy members often employ optometrists in their practices. Therefore, in order to provide comprehensive medical professional liability insurance for these practices, OMIC offers coverage to employed optometrists.

Optometrists applying for coverage with OMIC must fill out the Application For Additional Insured Employed Optometrist. If approved, the optometrist will be named on the policyholder’s declarations page. The OMIC policy provides that coverage applies only to services within the scope of the optometrist’s training, licensure, and employment by the employer. If the optometrist has other employment or provides activities outside of his or her employment by the OMIC insured, he or she must maintain separate coverage for that.

Optometrists are covered by OMIC for their liability due to their own actions as well as those of persons acting under the optometrist’s supervision, direction, or control, so long as that person was acting within the scope of his or licensure, training, and professional liability insurance coverage, if applicable. Likewise, ophthalmologist insureds are covered for their vicarious liability exposure arising out of the actions of any persons, including optometrists (employed or otherwise), under their supervision, direction and control, so long as that person was acting within the scope of his or licensure, training, and professional liability insurance coverage, if applicable. Entity insureds and their owners are also covered for their vicarious liability for the actions of optometrists for whom they are found legally responsible.

Generally, OMIC offers coverage to optometrists at either shared limits with the employer or separate limits. Currently, the premium for shared limits is based on 5% of the ophthalmologist Surgery Class 3 premium. The premium for separate limits is 9% of the Surgery Class 3 premium. For policies effective on or after January 1, 2011, the rates will decrease to 3.5% and 6.5% of the Surgery Class 3 premium, respectively. Part-time discounts may be available for optometrists employed for fewer than 10 hours per week.

Optometrists who are not employed by insured ophthalmologists or entities must secure their own coverage from a provider other than OMIC. Optometrists who are employed by an OMIC insured but choose to obtain coverage elsewhere must maintain liability limits at least equal to the limits carried by the employing ophthalmologist or entity. Non-employed optometrists otherwise affiliated with the policyholder (e.g., via contract) are not required to carry the same limits as the policyholder, but it is recommended.

While OMIC does not require implementation of specific optometrist supervision guidelines as a condition of coverage, OMIC recommends that practices have a written protocol that clarifies conditions and situations that optometrists may manage independently, those requiring consultation with an ophthalmologist, and those that must be referred to an ophthalmologist (see the Hotline in this issue, as well as “Coordinating Care with Optometrists,” available at www.omic.com).

Optometrists who take call must follow written protocols and have appropriate backup. An ophthalmologist must always be available within a reasonable response time to take patient referrals in the event a situation arises that exceeds the optometrist’s scope  of expertise or legal scope of practice. If the optometrist takes call for a hospital or emergency room, coverage is subject to review by members of OMIC’s physician review panel. The optometrist must submit a copy of the hospital’s written call protocol for evaluation (see “Coordinating Care with Optometrists”).

Regarding postoperative care, OMIC’s policy permits optometrists to provide a portion of the outpatient postoperative care if the optometrist is clinically competent and lawfully able to provide the care, the patient has given written informed consent prior to surgery for the planned comanagement, and the delegated care is performed under the operating ophthalmologist’s supervision (see the lead article and “Coordinating Care with Optometrists” for more information).

Although at least one state permits optometrists to perform laser surgery, OMIC does not insure optometrists who perform surgery, whether laser or incisional. OMIC based this decision on the lack of data available on this liability risk and on OMIC’s assessment that it does not have the expertise to properly underwrite, rate, and administer claims arising from surgical procedures performed by optometrists. Due to the related vicarious liability risks, OMIC is not willing to extend coverage to any policyholder that employs optometrists who perform surgery or to any outpatient surgical facility at which optometrists operate. Coverage of optometrists who perform intraocular injections (if permitted by scope of practice laws) requires physician review.

Special rules for coverage of optometrists apply in Kansas, Nebraska, and Pennsylvania due to state patient compensation fund requirements. (See your policy or inquire with your underwriter for more details.)

Reporting Malpractice Claims to the Government

By Kimberly Wittchow

OMIC Legal Counsel

Digest, Summer 2009

As many of our readers may be aware, the federal government recently passed legislation requiring that liability insurers, such as OMIC, report to the Centers for Medicare & Medicaid Services (CMS) the resolution of claims (by settlement, judgment, award, or other payment) by Medicare beneficiaries for bodily injury and medical payments. OMIC is registered with CMS and is gearing up for submission testing and eventual reporting.

The purpose of this “Section 111” reporting (referring to Section 111 of the Medicare, Medicaid and SCHIP Extension Act (MMSEA) of 2007)1 is to ensure that Medicare makes payments in the proper order or recovers payments when another entity (such as an insurer) is required to pay for covered services before Medicare does. Section 111 requires that OMIC determine whether a claimant or a potential claimant for damages due to bodily injury or medical payments is entitled to receive Medicare benefits. If so, OMIC must report the identity of the Medicare beneficiary whose illness, injury, incident, or accident is the subject of the claim, and provide other information that will enable CMS to appropriately coordinate benefits. The law sets forth procedures that Medicare can use to bring legal action against various parties, including a liability insurer, for failure to make proper reimbursement, and subjects responsible reporting entities (RREs) to fines for noncompliance.

This Section 111 reporting is separate from and in addition to the reports OMIC already sends to the National Practitioner’s Data Bank (NPDB), under another federally mandated reporting scheme. OMIC is required to submit NPDB reports when OMIC makes a payment for the benefit of an ophthalmologist or other health care provider in the settlement or satisfaction of a claim or judgment. (Insureds may have their own reporting responsibilities to the NPDB, as well. See the OMIC Risk Management Recommendations letter titled “Responding to unanticipated Outcomes” found on OMIC’s web site at http://www.omic.com/resource/risk_ man/recommend.cfm#responding.)

In order to trigger OMIC’s reporting responsibility, there must be an exchange of money resulting from a written complaint or claim demanding monetary payment based on the provision or failure to provide health care services. Per the NPDB requirements, OMIC sends a copy of the NPDB report to the appropriate state licensing board. The Health and Human Services Office of Inspector General (OIG) has the authority to impose civil money penalties if these reporting requirements are not met. Whenever the Data Bank receives an NPDB report, it sends a Subject Notification Document to the subject of the report (the OMIC insured ophthalmologist or other health care provider, not the patient).

In addition to this federally mandated Section 111 and NPDB reporting, many states also are seeking reporting of the same or additional claims information through their departments of insurance, departments of health, boards of medicine, or other state agency or department.

OMIC was formed as a risk retention group under the federal Liability Risk Retention Act of 1986 (LRRA) to insure the liability risks of American Academy of Ophthalmology members.2 As a risk retention group, OMIC is governed by only one state, its state of domicile, which is Vermont. This eliminates the need for redundant regulation.3

When these state-specific claims data calls were infrequent and the data sought was minimally burdensome to acquire, OMIC voluntarily complied with the requests. Over the past several years, however, the requests have multiplied and the data sought has increased dramatically. For this reason, OMIC has begun to respectfully decline these requests from the various states. To provide the federally required CMS and NPDB reports, plus detailed closed claims reports in every state, each requiring reporting in a different manner and on different time frames, would be extremely burdensome. This runs contrary to the intent of the LRRA, which is to increase the availability of commercial liability insurance by allowing RRGs to offer insurance nationwide while avoiding regulatory redundancy.

It is OMIC’s position that voluntarily completing such reports would pose a substantial administrative burden, the cost for which would ultimately be borne by our insureds. We are also concerned that our members’ confidential claims data could be subject to potential disclosure under state freedom of information acts, which could be detrimental to our insureds’ interests.

In some states, this may mean that OMIC’s insureds must report claims data that is not on the NPDB report to the licensing agency, department of insurance, or other state governmental entity, as provided by state law. We apologize for any inconvenience this may cause to our insureds, but believe it is in our policyholders’ best interest to resist this encroachment by state agencies outside of Vermont. OMIC, via your appointed defense counsel or claims representative, will be happy to assist you with obtaining the necessary information for the report (for example, the plaintiff’s address or date of birth).

1. 42 USC § 1395y(b).

2. 15 USC § 3901 et. seq.

3. National Association of Insurance Commissioners. Risk Retention and Purchasing Group Handbook. Rev. June 1999, p. 11-2.

Coverage for Use of Premium IOLs

By Kimberly Wittchow

OMIC Legal Counsel

Digest, Winter 2009

While use of premium intraocular lens implants (IOLs) does not directly impact your policy coverage with OMIC, you should be aware of the policy provisions and underwriting requirements related to the use of IOLs and how they might vary for premium IOLs. There are two scenarios in which premium IOLs might be employed. The first is refractive lens exchange (RLE) surgery and the second is cataract surgery.

Refractive Lens Exchange

OMIC uses the term refractive lens exchange for refractive surgery in which IOLs (premium or otherwise) are used to replace a patient’s natural lens in order to improve vision when visually significant cataracts are not present. All refractive surgery is excluded under the policy unless specifically added back on by endorsement.

If you seek coverage for refractive lens exchange, you must fill out a supplemental questionnaire and submit it to the underwriting Department for review. In applying, you agree to abide by OMIC’s general refractive surgery and specific RLE requirements.

If approved, an endorsement will be placed on your policy, adding coverage back for this procedure at full policy limits. (No additional premium is required.) This endorsement specifies that RLE is covered, but only when performed within OMIC’s underwriting requirements or any exceptions to the requirements granted in writing by OMIC. If you seek an exception to the requirements, you may do so in writing to your underwriter by completing the Exception Request Form. OMIC discourages exceptions except in extenuating circumstances and only grants exceptions on a patient- specific basis. Do not schedule surgery until your exception is granted.

RLE Underwriting Requirements

To see all of the refractive surgery and RLE-specific underwriting requirements, see the Guide to Refractive Surgery Requirements. These requirements, along with the RLE supplemental application, address patient selection criteria, informed consent, operative procedures, postoperative care, and advertising.

One specific requirement to note is that RLE must take place in a hospital or outpatient surgical facility approved for cataract surgery and full sterile technique must be followed. RLE may not be performed in a physician’s office, laser refractive center, or other facility that does not meet the standard for sterile conditions required for accreditation.

Other requirements specific to RLE are: (1) there must be an interval of at least a week between primary procedures, (2) all patients must undergo a retinal exam pre- and postoperatively and be advised of the increased risk of retinal detachment, and (3) patient selection guidelines for myopia and hyperopia (treatment of emmetropic patients is not covered) must be followed (see box).

The use of premium versus standard IOLs in RLE procedures does not make a difference as far as coverage is concerned, as long as, in using them, no underwriting requirements are violated. You are, though, required to address the specific IOL to be used in the informed consent process and explain its indications, risks, benefits, alternatives, and complications, as well as its off-label use for RLE.

Cataract Surgery

If the patient has selected the use of premium IOLs in cataract treatment, no special underwriting is required. Remember that a procedure is considered refractive surgery if the lens is completely clear or there are visible cataract changes that aren’t visually significant and not associated with patient complaints about vision. Cataract surgery is automatically covered under the policy (under surgery class 3). As long as the use of premium IOLs is within OMIC’s general policy requirements, no endorsement is required.

You should also note that the policy excludes coverage of clinical research or trials that are not conducted under and in accordance with an American IRB-approved protocol. Make sure that any premium IOL clinical trials you are involved in meet these standards in order to ensure coverage under your OMIC policy.

RLE UNDERWRITING REQUIREMENTS

Myopia. Patients must be presbyopic, age 40 or older, and have at least 6 diopters and not more than 15 diopters of myopia.

Hyperopia. Axial length must be at least 20 mm, and uncorrected visual acuity must be 20/40 or worse. Patients age 40 and older must be presbyopic and have at least 1 diopter and not more than 15 diopters of hyperopia. Patients under age 40 must have at least 4 diopters and not more than 15 diopters of hyperopia.

Shared Liability for ROP Screening

By Kim Wittchow, JD OMIC Staff Attorney

Examining premature infants for retinopathy of prematurity (ROP) is an important aspect of ophthalmic care. Ophthalmologists who perform this critical consultative function are providing a tremendous service to these infants and to the neonatal intensive care units (NICU) and supporting institutions that care for them. Because these institutions and ophthalmologists work together to reduce the likelihood that significant ROP will develop, they also should share the medical malpractice liability risk should a case of ROP advance to vision loss or blindness. If you perform ROP screening, you should know how your hospital handles this shared risk and take steps to limit your liability in the NICU.

Hold Harmless/Indemnification

One approach is to ask the hospital to hold you harmless and indemnify you for any liability you incur in performing ROP screening in the NICU. This means the hospital promises to absolve you of any responsibility for damages or other liability and to reimburse you for any loss you suffer arising from your provision of services in the NICU. This would be accomplished by inserting a hold harmless/indemnification clause in your ROP service contract with the hospital. Note, however, that many states limit the types of risks that can be transferred from one party (you) to another party (the hospital). Any indemnification agreement that you and the hospital enter into should be reviewed and/or drafted by legal counsel. Contact OMIC’s Legal/Risk Management Department for sample language.

An additional safeguard is for you to be named an “Additional Insured” under the hospital’s liability policy. This gives you direct access under the hospital’s policy to defense coverage for insured claims whether or not the hold harmless/indemnification provision is legally enforceable. However, “Additional Insured” status should not be obtained in lieu of a hold harmless/indemnification provision because the hospital’s insurance policy may not cover the loss.

Hospital-Provided or Funded Insurance

Another approach is for the hospital to provide you with additional insurance. Again, the specific provisions would be spelled out in your ROP service contract with the hospital. This hospital-provided insurance would coincide with your primary OMIC professional liability insurance. If you negotiate a primary or contributory policy with the hospital, then OMIC and the hospital most likely would share and cooperate in your defense and payment of any (covered) indemnity. (The OMIC policy describes how losses are apportioned when the OMIC policy and other insurance apply to the loss on the same basis.) However, if you negotiate an excess policy with the hospital, the hospital would not generally participate in the defense of the claim unless it is likely you will exceed your primary limits with OMIC. The excess limits would be available, though, if a judgment against you exceeds your policy limits with OMIC. Keep in mind that all determinations of coverage are case specific.

Another alternative is for the hospital to contribute toward payment of your insurance premiums. The AMA reports that hospitals are increasingly helping physicians pay their medical malpractice premiums to ensure that physicians continue to provide services at hospital facilities.

As an OMIC insured, one option for you is to raise your professional lia- bility limits and ask the hospital to reimburse you for the difference in premium. You should seek legal counsel when entering into these arrangements to ensure compliance with federal and state laws regulating hospital payments to physicians.

Damage Caps and Punitive Damages

When considering any of these options, you should be aware of state laws, such as those governing damage caps and the availability of punitive damages awards, because they will affect how much and what type of liability coverage you should seek. For example, if the state’s damage cap is $1 million and you have $2 million per occurrence/$4 million in the aggregate coverage, you can feel more secure that your limits will not be exceeded because of a jury award against you. However, if your state allows punitive damages awards, you might want to negotiate additional insurance from or indemnification by the hospital since the OMIC policy does not cover punitive damages. Your attorney should recommend the most appropriate and viable coverage alternatives and work with the hospital to draft the applicable terms.

You also should note that if a patient files a lawsuit, conflicts of interest may arise between you, the hospital, and other codefendants such as subsequent treating physicians. For example, you might disagree as to whose responsibility it was to provide follow-up ROP exams to a baby you examined once who was then transferred to another facility. In this situation, OMIC might exercise the right to separate counsel for its insured while still focusing on a unified defense.