Policyholder Services

Coverage for Investigations

By Kimberly Wittchow, OMIC Legal Counsel

Digest, Summer 2008

Sometime in your career, you may be either the subject of an investigation or the one performing such an investigation of another provider. In limited circumstances, OMIC’s policy provides defense and/or liability coverage to help you respond to claims made against you arising from your role in these scenarios.

Coverage for Medical Board Investigations

Anecdotal evidence suggests that there has been an uptick in the frequency of medical board investigations of physicians and their practices. In order to help our insureds respond to such proceedings, OMIC provides assistance in several ways.

OMIC’s professional liability policy, section Vii, Additional Benefits, provides limited legal defense coverage for “any investigation, disciplinary proceeding, or action for review (hereinafter “investigation”) of the insured’s practice by any federal, state, or local regulatory agency arising from a complaint or report by a patient to such agency of an injury to that patient resulting from a professional services incident involving direct patient treatment provided by the insured.” As the policy explains, coverage applies only when the investigation arises from patient injury due to treatment by the insured ophthalmologist. therefore, if the investigation stems from competitor complaints regarding unfair competition or sub-par provision of services, improper billing practices, or anything unrelated to a patient injury, this additional policy benefit does not apply.

OMIC provides this coverage because a complaint to a medical board concerning patient treatment may arise from, or lead to, a companion medical malpractice lawsuit. If OMIC’s claims personnel and defense attorneys can be involved in both matters, it can help streamline and coordinate a unified defense. Therefore, we encourage insureds to let us know as soon as possible about any board action involving direct patient care, even if the patient hasn’t made a claim or suit directly against the ophthalmologist.

If the policy does apply to a specific investigation, OMIC will pay a maximum of $25,000 per insured for claim expenses related to this medical board investigation. (the defense costs for any related medical malpractice claim are covered as a supplementary payment under section Vi of the policy and end only when the limit of liability for damages is exhausted.) OMIC will not pay any associated fines, sanctions, penalties, or other financial awards resulting from the medical board investigation.

You may also encounter situations where you are contacted by a state licensing authority in relation to another ophthalmologist, to act as a witness, prior or subsequent treater, or other. When you are not the subject of the investigation, the OMIC professional liability policy is not triggered.
However, you are welcome to contact OMIC’s Risk Management Hotline or Claims Department for advice. In certain situations, because your care of the patient may also come into question, OMIC may assign counsel as a precaution. This courtesy assistance outside of the terms of the policy is determined on a case by case basis. Remember that contacting the Risk Management Hotline is always confidential but does not trigger coverage. If you want to provide official notice to OMIC in order to preserve your rights under the policy, you must contact the Claims Department.

Coverage for Professional Committee Activities

You may also find yourself on the other side of a review board. As part of your professional endeavors, you may be asked to sit on an accreditation, utilization review, credentialing, quality assurance, peer review, or similar professional board or committee for a state licensed health care facility or professional association. With this role comes potential liability. Subjects of such a review may sue you, alleging that you did not accredit them because they are a competitor of yours and you want to restrict their practice in order to benefit your own. They may also allege that your peer review determination is libelous and has ruined their reputation and thus business prospects.

While the facility or association for which you provide this service may cover you for these activities, OMIC’s policy also gives you a layer of protection. Section ii, Coverage Agreement D, Professional Committee Activities Coverage for Ophthalmologists, covers claims that result from a professional services incident arising from insureds’ professional committee activities. Professional services incidents are acts, errors, or omissions that are “neither intended nor expected.” Therefore, acts you meant to commit would not be covered.

In addition, even though the policy generally excludes claims based on both wrongful acts and anticompetitive activities, it does provide defense only coverage for such allegations when they result from insureds’ good faith professional committee activities. Wrongful acts include allegations of malicious prosecution or abuse of process and libel, slander, or defamation of character. Anticompetitive activities are those alleged to be in restraint of trade, including interference with a contract, interference with a prospective advantage, unfair competition, unfair trade and business practices, and misappropriation of trade secrets.

The limits of liability for this coverage are the full limits of the policy, and coverage for damages (except where specifically excluded), in addition to legal expenses, is provided.

To report such a claim, contact OMIC’s Claims Department.