One of the keys to successfully launching an urgent care startup is understanding the fluid nature of the on-demand healthcare space and finding physicians, practitioners, and service providers like insurance companies, who understand the dynamics of this rapidly evolving industry. Over the last few weeks we’ve posted a series of blogs addressing cost, the importance of location, and other topics relevant to opening an urgent care. This week the focus is on malpractice insurance.
Although the urgent care model you choose will likely determine the malpractice coverage you choose, it’s important to know there are more options than traditional occurrence and claims-made policies.
What is slot coverage?
Slot insurance is often a good choice in the urgent care space primarily because it is can be more cost effective for clinics with part-time medical providers sharing patients and hours. Essentially, you aren’t paying full-time malpractice insurance rates for part-time physicians and providers. Instead, slot insurance is based on Full-time Equivalency (FTE). The cost for the slot is based on the number of hours worked by part-time providers, collectively, within a given period of time.
Here are a couple of examples of how it works.
- Clinic A has two part-time physicians working 20 hours each per week. They pay for one slot – comparable to the premium for one full-time provider.
- Clinic B has four part-time providers working 20 hours each week. They pay for two slots.
Essentially, each slot of the malpractice insurance covers the same amount of time worked by one full-time provider. In addition, with slot insurance you are not paying full long-term extended reporting period (tail) coverage for a practitioner who works for you only occasionally.
Slot insurance makes sense for urgent care clinics because it’s cost effective. Each provider doesn’t need to have individual coverage, providing immediate cost saving. The clinic pays a lower premium per part-time provider than it would if each provider were individually covered. And covered physicians can work as many hours as necessary, as long as they don’t exceed the number allowed by the slot.
Slot insurance is generally more flexible. Most malpractice insurance providers make it pretty simple to change the allotted hours in the slot. In addition, as long as a new physician is approved by the insurance provider, he or she can easily replace a physician who is leaving the clinic and vacating the slot.
No tail (Extended Reporting Period or ERP) coverage required. The clinic can save money because there’s no requirement to purchase tail coverage to protect the clinic assets unless the entire policy is cancelled. The slot is covered even when one provider leaves and another takes his or her place. This doesn’t mean that an urgent care group or practitioner cannot provide tail coverage. In fact, many policies provide for a limited amount of tail insurance to cover a provider for unexpected circumstances such as the closing of a practice or new ownership not providing coverages.
Slot coverage has some restrictions. It is a product created to meet the specific needs of certain healthcare practices and practitioners with varied hours and schedules.
- ER Physicians
- Locums Groups
- Home Health Providers
Before you open your urgent care, it’s important to think about every aspect of insurance protection. Take a good look at the policy and be sure it meets your coverage expectations.
Look to see if your policy covers things like:
- General liability
- Workers’ compensation
- Business continuity
- Attorney fees
- Court costs
- Medical damages and compensatory damages
- Cyber-security exposure
- HIPAA violations
Find out the maximum amount of coverage per occurrence, and be sure personal assets are protected in the event of a big claim.
And finally, securing malpractice insurance is vital to the startup process because certification and credentialing may be impossible without it. Many payers REQUIRE at least a letter of credible coverage from a medical malpractice insurance provider–some even require that a policy is in effect before they will consider an application. Yes, this means you have to have insurance before you even begin seeing patients to be considered for a contract.
But there is good news. According to recent data from the National Practitioner Data Bank, malpractice claims against physicians and other healthcare professionals have been steadily decreasing over the last decade. With a little luck, your urgent care may never have to deal with a malpractice claim. In the meantime, choose coverage that protects you and your financial health.
If you found this article helpful, check out other posts in our series on startups: 7 Simple Things to Think About Before Opening an Urgent Care