FTCA Wrap (Gap) Insurance
Wednesday, April 4, 2012
Posted by: Joy Ingram
by Cary Ecker, Vice President, Marketing, Washington Casualty Company
Since the inception of FTCA coverage in 1992, many community health centers have been able to dramatically reduce or entirely eliminate their professional liability expense. However, several facilities have chosen to obtain gap (aka: wrap) coverage to protect themselves from claims denied or not covered by the FTCA.
Several “gaps” exist in the FTCA coverage. Physical and sexual abuse claims are not covered. Although these types of claims are rare, their consequences are usually significant when discovered. Some wrap policies combine professional liability with general liability which is where the physical and sexual abuse coverage usually exists. You may want to clarify with your agent if the physical and sexual abuse coverage extends to the provider or if it is just for the facility.
There have been many attempts to extend FTCA protection to volunteers. Unfortunately, this remains a goal and not a reality. Community Health Centers have addressed this problem mainly in one of two ways: avoiding the use of volunteers entirely or relying on the volunteer to provide their own malpractice insurance. The potential problem with this arrangement is the patient believes they are being treated by both the provider and facility (they see the facility’s name on the building when they arrive for treatment). An injured patient’s attorney will undoubtedly name the clinic and the volunteer provider in a lawsuit. Several scenarios are possible; for example, the clinic may be dismissed from the lawsuit, the volunteer was practicing outside of the deeming scope for the facility nullifying any potential FTCA coverage; or the volunteer’s insurance company attempts to transfer liability entirely to the facility. Due to the uncertainty, it makes sense to have protection from a gap policy.
Several community health centers have expanded their operations recently. Some of these new facilities that were built or acquired were not deemed on the first day of operations; therefore, a gap policy became an important tool in the center’s expansion plans. Other facilities have increased the scope of services provided to their community like suboxone treatment. Gap policies provide coverage for non-deemed facilities and out-of-deeming-scope services that are valuable to the served community.
Significant gray areas exist in FTCA coverage concerning cross coverage arrangements and responses to disasters within or outside of a service territory making it important to at least consider adding a gap insurance policy to protect your facility’s future.
Gap policies are affordable and the pricing is based upon the number of outpatient visits (by type: primary care, dental, etc) per year. Some companies offer zero-deductible plans while others impose a significant deductible before they will provide assistance.
FTCA risk management mandates can be fulfilled by using gap insurance companies that provide in-person risk management services; such as, clinical assessments and staff training. It pays to compare the differences in gap policies and services.
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