Navigating Insurance for Advanced and Emerging Therapies
Medical practices must readily adopt advanced and emerging therapies to attract and retain clients in an ever increasingly competitive marketplace. In contrast to this rapid development in practice offerings, medical malpractice insurance companies are very slow to adapt. When unsure, they proceed with the upmost caution. This response can range from automatic declinations to very limited coverage terms, high premium, and extensive paperwork. So how must providers tackle the business need to move quickly while remaining protected? Here we’ll explore emerging therapy coverage for providers and best practices for navigating this issue.
Let’s follow a real-life example through this process. You’re a psychiatrist who has researched the positive effects of ketamine on patients experiencing depression and you want to start offering this therapy to your patients. You reach out to your med mal insurance company to inquire about ketamine therapy insurance. Here are the common responses you may experience in this exchange:
Option 1: The insurance company automatically declines coverage. They may state that ketamine therapy falls outside their appetite or is specifically excluded per coverage form (i.e., your policy spells out explicitly that this therapy isn’t covered). You will then have a few options for proceeding:
You can opt to not provide ketamine therapy.
You can provide ketamine therapy but do so knowing you’re uncovered for this particular exposure.
You can find coverage with another insurance company for ketamine.
Option 2: The insurance company is open to offering ketamine therapy insurance but needs additional information for their consideration. This includes details on your training, patient safety protocols, therapy setting, and more.
Training: Medical malpractice insurance companies have demonstrated that they are more open to writing ketamine therapy for psychiatrists and pain management physicians. They can be hesitant or even unwilling to write physicians outside these specialties and often show even more concern when a non-physician provider inquires. If a provider falls outside of these specialties, then the insurance company wants to see extensive training and will ask for additional details and documentation on this.
Patient Safety Protocols: Expect the insurance company to ask questions about patient selection, who is administering the ketamine, and procedures for patient follow up.
Setting: Insurance companies typically feel most comfortable when a physician administers ketamine in a medical office. Providers who offer ketamine retreats, for example, struggle greatly to find coverage. Underwriters perceive ketamine as a last resort treatment and find the retreat setting to be too casual and problematic.
If the carrier is then satisfied with the answers provided, they will offer terms. Expect that these terms can be subject to an additional premium or potentially a separate smaller sublimit. In the instance of the latter, the insurance company will allow coverage for ketamine but will assign a smaller bucket for claims related to this procedure to be paid out of. For instance, you may have 1M/3M limits for your overall policy but 100k/100k limits for ketamine-related claims only.
As demonstrated above, emerging therapy coverage is usually possible, but it requires finding the right insurance partner and potentially adjusting service specifics (e.g., the setting in which the therapy is administered).
If med mal for new treatments isn’t offered by your existing insurance company, it may need to be found in what’s called the non-admitted or excess and surplus lines marketplace. There are two classifications of insurance companies – admitted and non-admitted. Admitted insurance companies have more stringent oversight from a state’s department of insurance. As such, there are more consumer protections in place. The main one being that if the insurance company were to become insolvent, the department of insurance would have backup funds to pay claims. However, admitted carriers have much stricter underwriting guidelines and restricted appetite. When you’re unable to find emerging therapy coverage with an admitted market, you must seek coverage with a non-admitted carrier who has more flexibility to write risks the admitted markets can’t or won’t. This may be necessary for ketamine therapy, for insurance, if the provider requesting coverage falls outside of the preferred specialties.
Some other important considerations for med mal for new treatments include whether there is FDA approval and recent claims trends. If a treatment is non-FDA approved, for example, many medical malpractice insurance company policy forms specifically exclude coverage with no exception. There is likely standard language somewhere within your existing policy that states that coverage does not extend to medications that aren’t FDA approved or are being used for off-label purposes.
Another element to examine is recent claims trends. Like physicians, plaintiff attorneys also keep their fingers on the pulse of new medical trends. For instance, a string of class action lawsuits had been filed alleging that certain compounded GLP-1 medications are tainted as outlined here by the FDA. This has led to insurance companies restricting coverage for physician practices that utilized compounding pharmacies to supply their non-invasive weight loss medications. As such, emerging therapy coverage may be limited to a small handful of insurance companies who are still willing to take on this risk.
No matter the situation, a medical malpractice insurance broker like L&J who specializes in finding med mal for new treatments is a must. We have access to insurance companies who can write emerging therapy coverage, the expertise to understand and explain the intricacies of coverage terms, and can provide consultative guidance on how best to protect you and your practice through expansion and change. Get in touch today to learn more about how we can help heal your growing pains while remaining protected.