Market Update: Sexual Misconduct Liability in Healthcare Organizations

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

Rancho Mesa’s insurance brokers specializing in healthcare, education and non-profit organizations continue to navigate the hardening insurance marketplace, characterized by tighter underwriting guidelines, reduced limits of liability, increased deductibles, and higher policy premiums.

One of the sectors most impacted by the hardening market is healthcare and its ability to attain adequate insurance protection, specifically sexual misconduct liability insurance. Continued claim activity, social inflation, third-party litigation financing, and the increased cost of litigation all contribute to the hardening market conditions.

Consider the following data points in order to understand why the market is hardening. Several states have recently removed barriers to reporting abuse. Only five states maintain a criminal statute of limitations on claims of abuse. Nineteen states have eliminated statutes of limitations on civil claims. And, 30 states have enacted laws allowing victims more flexibility to revive claims of sexual abuse.

Additionally, according to the Institute for Legal Reform, from 2016 to 2020 the tort system’s direct economic costs grew 6% every year, exceeding both the inflation rate and GDP. That means more and more cases are litigated each year.

Not only are the number of cases increasing, but a 2023 report titled “Medical Malpractice Claims-Made Social Inflation and Loss Development Report” indicates that claims exceeding $1,000,000 continue to grow in frequency. So, the number of claims are increasing as the cost of claims are increasing.

An increase in third-party litigation financing, the practice of investors funding lawsuits in exchange for a portion of the settlement and return on the investment, can discourage prompt and reasonable settlements. This practice also reduces an attorney’s accountability to good faith standards and produces more lawsuits.

Impact to Sexual Misconduct Coverage and Healthcare Providers

Insurance companies are now reducing their financial risk for abuse exposures. This means medical professional liability underwriters may need additional underwriting information to quote limits in excess of $100,000. Additional underwriting measures may include issuing non-renewals, considering jurisdictional challenges, careful consideration of policies covering young patients, excluding all trafficking allegations, and adding a per victim or perpetrator deductible.

Risk Management Strategies for Healthcare Providers

Healthcare organizations can help mitigate some of the risk by:

• Using chaperones to reassure patients of a procedure’s professional nature. The chaperone provides a witness to support the practitioner’s actions.

• Performing examinations for a minor in the presence of a parent, guardian, or chaperone.

• Educating the patient about the exam and its necessity prior to the patient’s appointment.

• Documenting the exam’s medical necessity, the education provided to the patient, and the chaperone’s identity.

• Maintaining boundaries by establishing proper practitioner-patient relationships.

• Educating staff on proper patient interactions, professional boundaries and reporting of misconduct.

• Ensuring familiarity with your state’s reporting obligations related to sexual misconduct and include the requirements in your policies and procedures.

The legal environment and claim trends add financial exposure for both healthcare providers and insurance companies. Rancho Mesa will continue to monitor these trends to better educate and advocate for clients. Please contact me at (619) 937-0175 or sbrown@ranchomesa.com to discuss possible insurance solutions.

Preventing Stress Claims

Author, Jack Marrs, Associate Account Executive, Human Services Group, Rancho Mesa Insurance Services, Inc.

Specializing in non-profit insurance has opened my eyes to how difficult it is for some non-profit employees to deal with the stress related to their jobs. It’s the nature of the work. Helping people through difficult situations can be rewarding for an employee, but it can also be emotionally draining when they become invested in their clients to the point where it can lead to burnout.

Employees can suffer from emotional and mental illness as a result of their working environments, which can lead them to file workers’ compensation claims. Depending on the nature of the non-profit’s mission, employees may witness a variety of disturbing realities that the general public isn’t used to experiencing.

Since psychiatric injuries are based on an employees' personal experience, it’s much more difficult for physicians to verify these types of claims. Plus, these conditions can also develop from multiple stressors in an employee’s professional and personal life like when they are dealing with a death, going through a divorce, or filing for bankruptcy. So, it’s hard to determine what percentage of the claim is work-related and what percentage is caused by outside factors.

Workplace stress can trigger mental and physical illnesses and injuries, so identifying and correcting stressful situations early, can prevent costly health care costs and workers’ compensation claims.

Managers should periodically check in with their employees to see how they are doing with regards to their workload, relationships with clients, co-workers and vendors, etc., but also their personal lives. If there is an issue in the workplace, it can be addressed quickly before it causes extreme stress to the employee. If something is happening at home, it could be affecting their productivity and performance on the job. And, the employer may be able to refer their employee to resources to assist them as they deal with whatever stressors are in their personal lives. This also helps to establish if the stress felt by the employee is work-related or personal.

Employers can reduce workplace stress by ensuring effective communication from supervisors to employees. Whether the communication is about job duties and expectations, career growth within the organization, or a traumatic event and relevant resources to help employees cope, being transparent with employees can relieve some stress caused by not knowing what’s to come.

Stress claims take a tremendous toll on both employees working for non-profits and the organizations themselves. Rancho Mesa provides an extensive library of training offered through our Risk Management Center and the RM365 HRAdvantage™ Portal. These trainings can be easily accessed and allow for our non-profit clients to be proactive in mitigating the severe impact of stress claims. 

Contact me at jmarrs@ranchomesa.com or (619) 486-6569 to learn more about these options.

Healthcare Insurance Carriers Respond to COVID-19 Threat

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

As Rancho Mesa continues building resources for our clients and their employees across all sectors, we have compiled a list of healthcare insurance providers and their enhanced benefits designed to respond to the COVID-19 virus. Listed below is information related to COVID-19 testing when ordered by a physician.

Health insurers are responding to the Coronavirus threat by offering members no-cost screening and diagnostic testing.

Carrier	Enhanced Benefits1
Aetna	Screening/diagnostic testing provided at no cost. $0 copay telemedicine (for next 90 days2). Members diagnosed with COVID-19 will receive a care package with over-the-counter medications and cleaning supplies. CVS Health will help Aetna members that may be experiencing anxiety related to COVID-19 by: • opening Crisis Response Lines • providing plan sponsors with a Resources for Living toolkit • expanding 24/7 access to the Aetna Nurse Medical Line
Anthem Blue Cross	Screening/diagnostic testing provided at no cost.
Blue Shield of California	Screening/diagnostic testing provided at no cost.
Health Net	Screening/diagnostic testing provided at no cost.
Kaiser Permanente	Screening/diagnostic testing provided at no cost.
MediExcel Health Plan	Screening/diagnostic testing provided at no cost.
Oscar Health	Screening/diagnostic testing provided at no cost. Continuing to offer $0 telemedicine through Doctor on Call for most members.
Sharp Health Plan	Screening/diagnostic testing will be covered under the member's standard plan benefits.
Sutter Health Plan	Screening/diagnostic testing provided at no cost.
United Healthcare	Screening/diagnostic testing provided at no cost. Free Emotional-Support Help Line available for members suffering from fear or stress due to COVID-19, open 24/7.
Western Health Advantage	Screening/diagnostic testing provided at no cost.

¹ Screening/diagnostic testing when ordered by the physician.
² Aetna’s website states a 90-day window as of March 2020, but the page is posted without a start/end date. Check with Aetna before receiving services

View full table here.

For additional resources and telemedicine information for each carrier, download the full PDF document.

What is SB 562 all about?

It may be of interest, if not importance, for all Californians to know about current proposed legislation, sponsored by Senator Ricardo Lara of Bell Gardens and Senator Toni Atkins of San Diego.  The proposed bill would significantly expand the role of the state government within the healthcare system, by essentially establishing a single-payer system.

Under Senate Bill 562 (SB 562), the State would cover all medical services for every resident regardless of income or immigration status, including inpatient, outpatient, emergency, dental, vision, mental health, and nursing home care.  Furthermore, insurers would be prohibited from offering benefits that cover the same services, potentially resulting in their choice to exit the marketplace.  While the proposed bill touts that the program would eliminate co-pays and deductibles, and the need to obtain referrals, there is no mention of how it would be funded, except through “broad-based revenue.”

Obviously, many people ask me about the direction healthcare is headed in California and the Country; to which, I do my best to eliminate my interest in the subject since I make my living guiding companies through the insurance process.  But, I do offer up some food-for- thought in terms of evaluating such a proposal, including citing the increasing shortfall of funding for Medicare, and the VA as examples of government-run healthcare, as it seems to me the former is going to require an eventual increase in payroll taxes, which effects everyone, employers and employees alike, and the latter is a good example of inefficiency and lack of innovation when there is no competition.  

Personally, I believe that healthcare is both a right and a responsibility.  As out-of-whack as the current system seems, or let’s face it, is, I just don’t know how we go about funding such a proposal without breaking the proverbial bank. The financial and economic realities have to be weighed with the politics, which is why it’s a bit of a relief that Governor Jerry Brown has asked the question in return, “Where do you get the extra money?  This is the whole question?”

Whatever my thoughts, it is certainly a complex and vexing economic, social, and political issue for our times, one that will continue to be hotly debated and legislated, so there is much more to come.