Skip to content
Close
The Difference

August 2023

THE DIFFERENCE


Table of Contents

About This Issue...

“And Therein Lies the Difference”

It is not uncommon for our teams at ProAssurance to get questions from our agency partners, or requests for training materials for new employees at your agencies. It is often much easier to simply ask than try to locate a reputable source online; and an insurance designation may be premature for someone just starting out in the industry. 

We, of course, are more than happy to oblige. Our “differences” issue is becoming an annual tradition. Within, you will find a summary of some of the most common items professionals need to navigate as they begin to work in healthcare liability insurance. The side-by-side comparisons make it easy to compare so you can easily pick up the highlights of each. 

This issue is designed to work as a supplemental training manual, so please feel encouraged to pass it to your employees or others who may be able to make use of it. We do collect examples of differences to feature throughout the year, so if there is a topic you would like us to cover in the future, email your suggestions to AskMarketing@ProAssurance.com.  

And, as always, our team members at ProAssurance are always happy to answer any questions you might have. If you would like a quick rundown on insurance terms, ProAssurance products, state specifics, the claims process, or any other facets of the job, our regional teams are readily available to assist. 

Accounting for Differences: SAP vs. GAAP

In the United States, all corporate accounting and reporting is governed by a common set of standards known as “generally accepted accounting principles,” or GAAP, established by the independent Financial Accounting Standards Board (FASB). The FASB uses GAAP as the foundation for approved accounting methods and practices. Although GAAP is not legally binding, the Securities and Exchange Commission (SEC) requires that all publicly traded companies follow the principles. 

Insurance companies, on the other hand, are mandated by the National Association of Insurance Commissioners (NAIC) to follow a different set of accounting principles, called “statutory accounting principles,” or SAP. 

SAP vs. GAAP

 

Overview

So why do insurance commissioners require SAP? It comes down to the way insurance companies operate. Normal operations for other industries (i.e., non-insurance companies) involve selling products or services, rarely requiring refunds to the customer in excess of the amount paid. Therefore, GAAP works just fine. But because insurance companies know they will have to pay out on some policies—at an unknown time and often at amounts high enough that they could deplete financial reserves—following statutory accounting (commonly referred to as STAT) provides for more transparency of liquidity and assets.

The NAIC requires that insurance companies file quarterly and annual financial statements for the fiscal year that reflect the health of the company. The annual statement indicates the company’s value as if it were in liquidation rather than continuing in business.

In short, SAP aims to ensure the insurance company’s solvency so that they can fulfill their obligations to their policyholders. 
Differences

The two accounting principles differ in three main areas: the basis of the accounting, the matching of revenue and expenses, and the treatment of assets for accounting purposes.

GAAP works on the assumption that a company will continue past the period covered by the financial reports. There is more emphasis on the long-term profitability of the company, because if a company is consistently profiting, debt is not necessarily a problem. SAP, on the other hand, assesses a company’s financial position as if it ceased to exist and the effects that would have on its policyholders and claim paying ability. It is more of a snapshot with no future outlook. 

While most assets have at least some value under GAAP, some assets have no value under SAP. In addition, while GAAP follows the matching principle when preparing a company’s financial statements, SAP does not. The matching principle allows an entity to record the expense related to a product only when the sale of the product is recorded in the financial statements.

According to the NAIC, SAP was developed in accordance with the concepts of conservatism, recognition, and consistency: 

  • Conservatism: Conservative valuation procedures provide protection to policyholders against adverse fluctuations in financial condition or operating results. Statutory accounting should be reasonably conservative over the span of economic cycles, and in recognition of the primary responsibility to regulate for financial solvency.
  • Recognition: The ability to meet policyholder obligations is predicated on the existence of readily marketable assets available when both current and future obligations are due. Assets having economic value other than those that can be used to fulfill policyholder obligations, or those assets, which are unavailable due to encumbrances or other third-party interests should not be recognized on the balance sheet. Rather they should be charged against surplus when acquired or when availability otherwise becomes questionable.
  • Consistency: The regulators’ need for meaningful, comparable financial information to determine an insurer’s financial condition requires consistency in the development and application of statutory accounting principles. 
Additional Accounting Requirements

Individual states have regulatory authority over insurance companies. They require SAP for quarterly filings as well as annual statements; however, if the ownership structure of the insurance company is a publicly held corporation, then they must file GAAP financials with the SEC as well. Both SAP and GAAP filings are public, so investors can get an accurate estimate of outstanding claims versus revenue.

Dana Hendricks, ProAssurance’s Chief Financial Officer, also notes that—as a publicly held company—ProAssurance has access to capital markets that mutual companies do not have access to. “Being a publicly held company provides ProAssurance the opportunity to raise capital by selling shares of stock,” she says. And unlike loans, capital raised from shares does not need to be repaid.
Ownership Structure

According to Rob Francis, ProAssurance’s President of HCPL, ownership structure provides vital clues regarding financial health, as well as customer service quality and changing market sustainability: “In 20+ years at ProAssurance, I don’t recall a single client raising questions about ownership structure. When an agent is reviewing the pros and cons of competitive quotes, ownership structure is simply not on the spreadsheet. That’s a shame, because it does have a material effect at both the individual account service level and on overall company health,” Francis said.

In the medical professional liability sector, which relies on long-term financial security, three of the top four professional liability companies are part of a publicly traded company. Francis believes a stock ownership structure offers several specific advantages over a mutual structure:

  • Investor Accountability: Institutional investors are adept at evaluating the business operations and performance of companies in their portfolio.
  • Higher Regulatory Standards: Public companies must meet a higher standard due to additional regulatory requirements and are, therefore, inherently transparent. The more transparency and disclosure, the more confidence a buyer can feel in selecting a carrier, and the more comfortable an agent can be when advising their client. We must report to the NAIC and relevant state departments of insurance, including periodic state audits. Additionally, ProAssurance must disclose material events publicly and file reports with the SEC. We’re bound by the Sarbanes–Oxley Act and other federal laws applicable to public companies. This means our officers are directly responsible for the accuracy of all financial reports and the integrity of key controls.
  • Resiliency to Market Cycles: Insurance is a highly cyclical industry, and of the specialty lines, MPL has among the longest tails. The operating environment in which a buyer chooses its MPL carrier or experiences a loss event may be radically different than when the company is called upon to defend a claim. Public stock companies have more flexibility in accessing capital markets, plus many investment banking and other financial industry relationships to call upon in hard times—or in times of opportunity. Publicly held companies such as ProAssurance are well equipped to weather market cycles and, therefore, provide a more consistent level of service.

Hendricks agrees there is financial security arising from the heightened scrutiny of being a publicly held company. “You can be confident that you have full transparency with ProAssurance,” she says. “As a publicly held company, we operate with a higher level of transparency through our quarterly and annual financial statement filings with the SEC.”
Sources

National Association of Insurance Commissioners. “Statutory Accounting Principles.” May 31, 2023.   

Risk & Insurance. “5 Advantages of Public Stock Over Mutual Insurance Companies.” September 2021.  

Admitted vs. E&S

ProAssurance offers innovative liability solutions for a variety of healthcare classes of risks with diverse needs. While most of our physician book is admitted business, most other types of healthcare business are written through excess and surplus lines (E&S). E&S products can offer increased flexibility for risks that require customized coverage due to evolving exposures or other goals.

Regulation, Flexibility, and Oversight

The biggest differences between admitted, or “standard,” insurance and E&S lines are the amount of regulation, the flexibility in writing policies, and the level of state involvement in guaranteeing coverage.

An “admitted” insurance company is one that has been licensed and authorized by the insurance department of your state. Admitted carriers are subject to all state insurance regulations and must file their specific rates, rules, and forms that can be used.

E&S, or “non-admitted,” carriers are able to draft their own insurance contracts and do not submit their forms and rates to state regulators for approval and acceptance. This enhanced flexibility allows for coverages and terms that are more customized to a specific account. While E&S carriers are not licensed by the state, they are permitted to do business in that state. Also, while E&S insurers are not regulated by each state in which they do business, they do have to adhere to the regulations and guidelines of their domicile state.

Many states require that E&S insurers only write a policy if it has been rejected by admitted insurers, though some states have a list of eligible classes that are exempt from such a “diligent efforts” process. In all cases, the agent or broker placing coverage on an E&S policy must have a valid surplus lines license.

Surplus lines carriers do not generally participate in state guaranty funds—funds administered by the state to pay claims in the event an insurer becomes insolvent. However, in most states, they still must be permitted by the state department of insurance to offer MPL insurance and are subject to the same financial strength ratings as standard markets. Some states maintain a list of permitted E&S carriers.

Carriers must meet certain financial and regulatory criteria mandated by each state. These requirements usually include the establishment of substantial surplus and/or demonstration of adequate reinsurance. States require E&S carriers to include a disclosure on the policy that lets the insured know the company is not covered by the state’s guaranty fund and the rates, rules, and forms have not been reviewed by the insurance department.

Article Graphics Transparent-02

Typical Types of Risk for E&S Lines

The E&S insurance markets originated when those who needed insurance coverage were unable to secure it from the standard admitted companies. E&S carriers play a critical role in insuring higher-risk healthcare groups such as hospitals, telemedicine groups, and physicians whose practice profile does not fit well with admitted carriers.

The typical types of risks written in E&S lines include those that:

  • Are considered “high risk” by the admitted market
  • Require higher limits than offered by standard markets
  • Require specialized or unique coverage
  • Have excessive or otherwise unacceptable loss history
  • Have broad exposures and warrant individual rating 

E&S insurance policies can only be sold through licensed surplus lines brokers. As a licensed E&S carrier, ProAssurance Specialty Insurance Company can provide single-source solutions for your physician and healthcare facility clients seeking alternatives to the standard MPL coverage.

Physicians, physician groups, and medical facilities are considered based on their unique attributes and requirements. Our Specialty HCPL team works with approved wholesale and national retail brokers to find customized coverage options. Solutions may include varying levels and structures of coverage to suit your clients’ needs.

E&S products must be accessed through an authorized wholesaler. Agencies without an E&S license may benefit from working with the ProAssurance Agency on E&S placements and/or in the event of agent contract limitations. ProAssurance Agency serves appointed agents and brokers nationwide.

Does your agency need access to E&S placements? Call 844-331-6298 or email PRAAgency@ProAssurance.com.

Occurrence vs. Claims-Made

August TOC3There are two basic types of medical professional liability insurance policies: “occurrence” and “claims-made” coverage. Among insureds, there’s often confusion as to the difference between the two. Because the type of policy directly affects the kind of coverage your client will have, it’s important they understand how each type works.

The major difference between these policy forms is how coverage is provided:

  • Occurrence policies cover incidents that occur during the policy period regardless of when they are reported. There is no need to purchase tail coverage (reflected in the higher premium charged for this coverage), but the buyer’s coverage is restricted to the limits purchased during that policy period.
  • Claims-made policies cover incidents that are reported/made during the active policy period—on or after the retroactive date and before the policy expiration date. Tail coverage must be purchased to provide continuing protection for incidents reported after the policy expiration date.

Claims-made coverage is the most economical professional liability coverage form for physicians, dentists, and other professionals in the United States today. With a claims-made policy, an insured can increase their policy limits or add coverages as needs change or as new coverages become available. The claims-made policy is more flexible and provides considerable cost savings during the early years.

Claims-made coverage eliminates some of the uncertainty created by the long-tail nature of healthcare professional liability claims (i.e., how long it takes a claim to be resolved as measured from the date of the originating incident). It may offer more flexibility and enables ProAssurance to provide coverage and rates that more accurately reflect the ever-changing healthcare environment and any potential losses.  

Coverage Features

A ProAssurance claims-made policy provides for tail coverage in the event of death or disability. Insureds also receive tail coverage upon full retirement when continuously covered by ProAssurance on a claims-made basis for a minimum of five years.

For large healthcare organizations, ProAssurance offers tail coverage on both an admitted and excess basis. Insureds can choose from a variety of personalized coverage options, including a deductible, subject to underwriting approval.

Will Tail Coverage Be Needed?

Tail coverage is necessary upon retirement or otherwise ceasing the practice of medicine. If your client is moving coverage from an occurrence policy, tail coverage is not necessary. If they are moving coverage from another insurer’s claims-made policy, this coverage may be handled under the prior acts coverage of the new claims-made policy.  

With a ProAssurance policy, tail coverage is available—whether for a premium charge or at no additional cost.

  • Occurrence
  • Claims-Made

A policy that covers an insured against any covered claim that arises from an event occurring during the policy period regardless of when the claim is reported. If you have questions, please call your Business Development representative.

Occurence vs Claims Made Graphic Transparent-01

 

A policy that covers an insured against any covered claim that arises from an event occurring on or after the retroactive date and made (reported) during the policy period. If you have questions, please call your Business Development representative.

Occurence vs Claims Made Graphic Transparent-01

 

What’s the Difference? Funds and Groups and Limits, Oh My!

What's the Difference?Over the years, states and territorial jurisdictions (as well as the insurance industry itself) have developed various mechanisms to provide options for medical professional liability insurance coverage, increase its availability, and ensure coverage availability during a market or carrier crisis. The availability of the mechanisms described below varies by jurisdiction and includes policy options (shared limits vs. separate limits), excess coverage options (patient compensation funds), additional coverage mechanisms (RRGs, RPGs, and JUAs), as well as state funds to protect claimants in the event of carrier insolvency (guaranty funds).

While guaranty funds, RRGs, and RPGs are available in all jurisdictions, some states make additional mechanisms available to provide a broader scope of support for the market. For example, Pennsylvania (under their MCARE Act) has both a PCF and a JUA. Florida has two PCFs (a general one that will be de-commissioned by December 31, 2023, and one explicitly for birth-related neurological injury). And in 2020, South Carolina consolidated its PCF fund and JUA fund into the South Carolina Medical Malpractice Association (SCMMA).

What’s the difference? Read on…

Shared Limits vs. Separate Limits

Insurance policies with multiple insureds sometimes offer the policyholder the option of shared limits or separate limits. The difference between these options dictates how the coverage limits of the policy are available to its individual insureds.

Separate Limits: The entity, each insured, or both have coverage up to the full limits of the policy.

For example, on a surgical center’s policy with a $1,000,000 per claim limit, if the surgical center, one of its surgeons, and one of its anesthesiologists are named in a claim, each would have their own $1,000,000 coverage limit for the claim.

Shared Limits: A single limit covers the organization and the individual insureds on the policy.

In the example above on a shared limit policy, the surgical center, surgeon, and anesthesiologist are covered by and share in the same $1,000,000 limit.

For physician insureds—whether in group or solo practice—it’s important to note that hospitals may require separate limits and specific liability levels for physicians maintaining admitting privileges. Likewise, states may have their own requirements on limits or prohibitions against shared or separate limits in certain scenarios. Pennsylvania, for example, does not allow shared corporate limits. In states that have no prohibition against it, it is quite common for corporations to not obtain separate limits, but instead to share in the limits of their insured physicians.
RRG vs. RPG

Two alternatives to the standard insurance carrier for organizations seeking liability coverage are risk retention groups (RRG) and risk purchasing groups (RPG). The primary differences between RRGs and RPGs are who bears the group’s risks and how they are regulated. Both RPGs and RRGs are limited to placing liability coverage. [NAIC State Licensing Handbook]

Risk Retention Group (RRG): An RRG is a liability insurance company owned by its members. As described by the NAIC, RRGs “allow businesses with similar insurance needs to pool their risks and form an insurance company that they operate under state regulated guidelines.” As an insurance entity, the RRG, therefore, bears the liability risks of the group’s members. RRGs operate under the applicable laws and regulations of their domiciled state as well as the federal Liability Risk Retention Act (LRRA), which enables their establishment. Some features of an RRG include: [NAIC]

  • All insureds of an RRG must be owners of the RRG.
  • All owners of the RRG must be insured through the RRG.
  • RRGs may be formed under a state’s captive or traditional insurance laws.

Another unique feature of a captive RRG that distinguishes it from other captives is that it can write directly in a non-domiciled state without obtaining a license “by completing a registration process and designating the state’s commissioner as agent for service of process.” For this reason, RRGs are treated like multi-state insurance companies and are subject to NAIC accreditation standards established to suit the unique nature of these entities. [NAIC]

Risk Purchasing Group (RPG): An RPG is a group of insureds engaged in similar businesses or activities authorized to purchase insurance coverage from a commercial insurer. [IRMI]

RPGs are formed to pool the purchasing power of their members to negotiate favorable terms with insurance carriers. Because RPGs operate under the LRRA as purchasing entities marketed by insurers but are not themselves insurers, they are generally not subject to state insurance laws. [NAIC State Licensing Handbook] Carriers selling policies to RPGs must generally follow the transaction regulations in that state. Therefore, both admitted and surplus lines insurers and producers must follow appointment and licensing rules as appropriate for their line of business. [NAIC State Licensing Handbook]

Learn more about the ProAssurance RPG, Ob-Gyn Risk Alliance—the first medical professional liability insurance program established exclusively for obstetrician-gynecologists to address the unique challenges and liability risk exposures in their practices.
PCF vs. JUA vs. Guaranty Funds

There are multiple resources managed by states—including patient compensation funds, joint underwriting associations, and guaranty funds—that support stakeholders in the medical professional liability market.

Patient Compensation Funds (PCF): A state-operated program to provide excess medical liability insurance coverage for eligible healthcare providers.

Eight states currently operate patient compensation funds (with Florida’s standard PCF being dissolved by December 31, 2023), many funded by surcharges on the underlying coverage. They vary by state on features such as provider eligibility, coverage details, surcharges, residency requirements, requirements for underlying coverage, and more. Provider participation in these funds also varies by state. It is mostly voluntary in Indiana, Louisiana, Nebraska, and New Mexico, while in Kansas, Pennsylvania, and Wisconsin participation is largely mandatory for most providers.

The compensation available under a patient compensation fund is in excess of underlying coverage obtained by eligible healthcare providers from their liability insurers. The funds also generally limit a provider’s liability to a specific amount. At the time the funds were created, they were seen as an effective way of increasing accessibility to medical malpractice insurance at a reasonable cost.[Schrero]

Visit the ProAssurance Resource Library for a brief history of PCF funds as well as details on participation, coverages, and other details of the existing state patient compensation programs, as well as information about states with birth-injury funds.

Joint Underwriting Association (JUA): A nonprofit risk-pooling association established by a state legislature as a response to an availability crisis in specific types of insurance coverage.[IRMI] It is created as a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.[NAIC] Participating carriers generally share in the profits and losses associated with the program.[iii]

A number of states have established JUAs to provide medical professional liability insurance for physicians who are unable to obtain affordably priced insurance coverage in the standard marketplace.[IRMI]

Guaranty Funds: A state guaranty fund assumes responsibility for payment of covered claims to protect policyholders from “financial losses and delays in claims payments due to the insolvency of an insurance company.”[NAFA]

Guaranty funds are a solution for protecting insureds if an insurance company becomes insolvent. Initially developed as a single fund for one line, many states now have separate funds for various lines. Now every U.S. state plus Puerto Rico, the U.S. Virgin Islands, and Washington, DC, has implemented a guaranty fund[Investopedia] and all carriers are required to participate in these funds with an assessment of a percentage of their total net premiums.[NAFA]

Claims Status Terminology

Representatives in MPL insurance might appreciate a review of the basic terminology inherent in the different stages of the MPL claims process. Clarity of policy language, an understanding of protocols and procedures in the reporting and filing of claims, and familiarity with the elements required to establish a lawsuit, help guide our agents in serving our insureds.

Claims Status Terminology

 

  • 1. Incident Date
  • 2. First Notice
  • 3. Claim
  • 4. Lawsuit
  • References

Incident Date

Also known as the occurrence or accident date, this is the day of the alleged injury, death, or other adverse event suffered by a claimant. The incident is what initiates that individual’s complaint or claim. For occurrence policies the incident date determines the policy year that coverage will be afforded to the provider.1

First Notice

A first notice, or first notice of loss (FNOL) is usually the first step in the claims process and refers to the first report made to the insurance provider after a claimant’s alleged loss. Here it is the healthcare provider’s initial notice informing their MPL insurance carrier of a patient’s stated or implied dissatisfaction with care, or of an adverse event that could potentially lead to a claim. This notice is not a lawsuit or demand for monetary recovery but, rather, an alert of a potential claim. The healthcare provider’s policy requires the insured to immediately inform the carrier of anything resembling a legal notice or claim, such as a citation or petition. Prompt notification of these alerts is essential for the insured to avoid any issues in their coverage and to help ensure protection against possible harmful conduct.3 With a claims-made policy, the date a first notice is reported will be considered the date the claim is made, should a claim later be pursued.

As noted, healthcare providers are urged to immediately report any potential claim to their insurance carrier. This means indications or warning signs of a claim, including but not limited to the following:

  • A patient’s expression of dissatisfaction with treatment
  • Written or verbal threats of legal action
  • Delivery of legal papers such as citations or deposition notices
  • Requests for patient medical records for reasons other than a transfer of care
  • Report by a staff member of a potential incident involving a patient
  • A suspicion by a healthcare provider of an error in their own treatment

Claim

Unless otherwise defined in the insurance policy, a claim is a written or oral demand for compensation (money or services) made by a patient or patient representative for a perceived damage or loss.1 This alleged loss or damage could mean an injury, death, or other negative outcome related to treatment.2 A lawsuit is considered a claim1, though this term refers commonly to the formal litigation process in the court system. The claimant may present a demand to the healthcare provider documenting allegations of negligence on their part, i.e., “failure to use ordinary care.” They may file a complaint for damages in the court system, naming the provider as a defendant.3 A healthcare provider may be a physician, dentist, nurse practitioner, nurse, or other healthcare professional. A provider can also be the facility or organization that delivers patient care or sells and maintains medical equipment for that purpose.2 A healthcare provider initiates reporting of a potential claim, and the insurance carrier gathers important and relevant data to determine the type of claim, its impact, and the available coverage. This information includes the patient’s name, date of birth, medical records, date of the alleged event, and the allegations in the complaint. A claims representative or specialist, assigned by the insurer, guides the healthcare provider through the next steps in the claims process. If a lawsuit is filed, the carrier assigns legal counsel or, if requested, may consider using the provider’s own attorney, and together they begin formulating a defense.3

When a claim must be reported depends on the type of the medical provider’s liability policy. In a claims-made policy (the most common type of MPL insurance), a claim must be made against the provider and reported during the policy period, within the active policy dates, for it to be covered. For an occurrence policy the incident must occur during the policy period, but the claim may be reported on any date, even when the insured’s policy is no longer active. A policy will indicate the coverage available for the provider, as well as any exclusions. Coverage generally includes the costs to defend a claim, including court and attorney fees, incurred medical expenses, and settlements. Whether coverage may be provided for punitive damages, and whether damage caps apply, is determined by applicable state law.2

  • The following are examples of claims that may be covered by MPL insurance:
  • Misdiagnoses
  • Medication errors
  • Premature discharge from a facility
  • Care-related Injuries
  • Treatment errors or omissions
  • Unnecessary procedures

Lawsuit

In the MPL context, a lawsuit/suit is a complaint or action initiated by a patient or patient representative and filed in the court system, demanding recovery of damages for a perceived loss. The lawsuit alleges that one or more defendants1 (healthcare providers or organizations) committed an act of negligence or omission related to the patient’s care, resulting in an injury or adverse event.3 The process for legal proceedings and jury selection for a lawsuit are determined by state.

To file a medical negligence lawsuit, four elements must be asserted in the complaint regarding the healthcare provider:

  • Duty: They had a responsibility for the patient’s care and treatment.
  • Breach of Duty: They committed a breach of duty or negligence, in that they failed to meet the community’s standard of care.
  • Causation: Their alleged act or omission was the cause of the patient’s negative outcome, i.e., injury or death.
  • Damages: The act or omission reaches a level sufficient to warrant economic or noneconomic payment to the patient or patient’s family. (Such payments might include money to cover medical bills, lost wages, legal fees, and pain and suffering.)4

When a lawsuit is reported and coverage is confirmed, the insurance carrier assigns the healthcare provider a lawyer, who will answer the lawsuit. This answer is time sensitive, so timely reporting by the healthcare provider to the insurance company at the first indication of a lawsuit is imperative.3

References

  1. Medical Professional Liability Insurance: A Practitioner’s Primer. MPL Association. (reprinted with permission). 2019.
  2. Lam, Jackie. What is Medical Malpractice Insurance? Forbes Advisor. 2022.
  3. Berry, D. Bowen. The Physician’s Guide to Medical Malpractice. Baylor University Medical Center Proceedings. 2001.
  4. Bono, Michael J.; Harrison R. Wermuth; John E. Hipskind. Medical Malpractice. StatPearls. 2022. 

ABSA vs. LPS 

The Risk Management team will be adding a new tool for potential premium credit in 2024—the Annual Baseline Self-Assessment, or ABSA. The ABSA offers a unique and innovative approach to risk identification and mitigation to better meet the risk management challenges of today’s healthcare practices. We will continue to offer our traditional Loss Prevention Seminar (LPS) in 2024, allowing physicians to choose the path to potential premium credit which best serves their needs.

ABSA vs. LPS

What Is It?

ABSA

The Annual Baseline Self-Assessment is an online assessment taken by a medical practice. The results are benchmarked, and the practice receives a customized report showing areas where they may be excelling and where there may be opportunities for improvement. Everyone in a medical practice plays an integral role in healthcare delivery and is included in the process by answering online survey questions. The questions are quick and easy to answer and focus on the primary drivers of medical malpractice risk. Participants’ responses are anonymous, and results are aggregated to provide a comprehensive picture of the practice. From physicians to non-physicians, clinical and administrative staff, everyone has a role in identifying risk and improving patient safety. The assessment offers unparalleled opportunities for practices to see how they compare to their peers and similar practices.

LPS

The LPS is the ProAssurance Risk Management team’s annual program to offer insureds opportunities for CME and premium discounts. The theme for LPS changes every year. This year’s theme is Navigating Everyday Risk: Using Data to Drive Change. The LPS is designed for a broad range of educational materials. This year’s LPS covers high-risk areas for medical practices and our insureds, including diagnostic testing, scheduling, culture, and more. The 2024 Loss Prevention Seminar topic will be announced later this year.

How Long Does It Take?

ABSA

The survey takes approximately ten to fifteen minutes for each individual to complete. Risk Management Data and Technology Manager, Aaron Hamming, says the ideal is for every employee in the practice complete the survey and share their input. The goal is to have 80% or more of the people associated with the practice complete the survey. This has been the key to unlocking the best insights and actionable results.

LPS

The seminar takes about two hours to watch and then it is followed by a posttest that an individual must successfully complete to receive CME. The 2023 LPS is broken up into 10 categories, with a subject matter expert speaking between fifteen to twenty minutes on their topic.

What Are the Main Differences?

While both tools are built to help reduce claims and improve patient safety, the ABSA provides customized feedback and educational opportunity for ProAssurance insureds. As Hamming says, “We’ve produced a lot of great educational content over the years and will continue to put out great content. But educational content can be a passive experience that, by necessity, focuses on more general topics. A tool like the ABSA identifies specific risks a practice faces and connects them with resources and consultations that can address those concerns. To put it in a medical context, the ABSA is like an annual checkup. We can review the vital signs and focus on preventative care and wellness.”

URL vs. Subdomain vs. Path Pages 

ProAssurance is constantly innovating its processes, education, and resources for our agency partners and insureds. Our organization has gone through changes over the past few years and now our website is going through changes to match ProAssurance’s innovation. With the incredible leadership of Digital Marketing Coordinator, Andrew Segura, as well as the HCPL Marketing team, ProAssurance Group websites as well as its subsidiaries will move toward a similar look to allow insureds, agency partners, and other individuals to easily view and navigate the websites. 

Domain Graphic BIG-01

 

Terms to Know

To understand how the websites work, we have provided a small terminology list. These terms are intertwined when discussing how websites are built. These labels also are to highlight how the new ProAssurance websites will be related to one another. With the updates, each line of business and division of ProAssurance will have its unique webpage or subdomain, however this does not mean the pages are not connected.

URL

A unique identifier used for locating resources on the internet and contains the following elements: protocol, subdomain, domain, paths or subdirectories.

Example = https://www.proassurance.com/about-us/divisions-and-programs/

  • Protocol – https://
  • Subdomain – www.
  • Domain name – proassurance.com
  • Path & subdirectories – /about-us/divisions-and-programs/
Protocol

A way to securely encrypt information you store on the domain.
Domain This locates an entity or in ProAssurance’s case an organization.
Subdomain

Has two use cases with the most common subdomain being “www.”

  • It contains a website’s homepage and the most important pages.
  • It is used to separate a section of a website from the main site.
    • Example: agents.proassurance.com and riskmanagement.proassurance.com
Path Pages or Subdirectories

This tells a browser to load a specific page, file, or resource.

New ProAssuranceGroup.com

ProAssurance Group Home
ProAssurance Group Careers
ProAssurance Group Corporate
ProAssurance Group

Question and Answer

Why are we doing this now?

The ProAssurance HCPL Marketing team moved to create a new website to make it more modern and user friendly for not only insureds and agency partners, but also for anyone who comes across the organization’s services and sites. When the ProAssurance.com website was originally built, it was designed as a “one-stop-shop.” Now, websites are typically designed to be focused on specific information, and individuals are more willing to visit different sites with the specific information they are looking for at the time.
What are some of the changes that are coming?

The look and feel of our branded websites will be desktop, tablet, and mobile friendly. The websites will have built-in tools to help users with visual and audio disabilities. ProAssurance will be using tools to make the websites easily searchable and have better visibility in search engines.
How long will the websites be in development?

Each website will take varying amounts of time depending on the size of the website. 
What is included in the process of building a new website?

Review Process

1. The HCPL Marketing Communication team reviews content living on the old websites and makes the necessary changes to the content. The Compliance department then reviews the revised content and communicates their required changes to the Marketing and Communications team. The Marketing and Communications team applies Compliance's revisions and then sends all content to the digital team for placement on the new site.

2. The number necessary of pages is reviewed. The Digital team reviews the existing sites and decides what can be combined into singular pages and what new pages should be added.

Building Process

1. Using a website management platform, the Digital team creates a first build of the website with the existing copy. This gives the Marketing Communications and Design teams an idea of what the site will look like. In essence, it is a living wireframe.

2. The Digital and Design teams work together to create the banners, logos, and graphics needed for each page.

3. The Communications, Compliance, and Digital teams work to put together the content on the first edition of the pages.

4. The Digital team verifies that the navigation, SEO, and all functionality is performing as expected.

5. The Digital team works with the IT team on the purchase of the new domain name and addition to a website management platform if necessary.

6. All teams work together for final content and functionality checks.

7. The website is officially live!

ProVisions Digital Magazine vs. The Hardcopy

By Steve Dapkus, Senior Vice President, Marketing and Risk Management 

ProVisions DigitalAre you reading this article on the website? If yes, did you know we are continuing to layout the full issue and print/mail the magazine as a hardcopy? If you are reading that snail-mailed hardcopy now, did you know the magazine has a digital sibling built out on the Agents.ProAssurance.com subdomain (those who don’t know what a subdomain is see Andrew Segura’s article, "URL vs. Subdomain vs. Path Pages" above that explains what it is and the difference between it, a URL, and file path for a website). 

The ProAssurance Digital Marketing team created the ProVisions website last year and published our first edition in February 2023. Every month since then has been online and they managed to backfill 2022’s issues to August. The reasons to go digital on the front end are easy to see and the impact on the back office should be pretty easy to assume.

The main front end is a much better user experience (UX). If you are used to reading ProVisions on your phone, a responsive webpage beats an emailed PDF every time. The digital version also enables navigation elements to take you straight to your content of interest, data-driven graphics to play with, and gifs and other moving parts that make being online a little more fun. On the roadmap for future enhancements is adding search to surface the now significant back-catalog of content and subscription/share tools for better audience reach.

On the back end, digital lets us leverage that significant back catalog for search engine optimization (SEO) and user-interest analytics to feed back into our editorial process. I’m unsure about the future of SEO strategies in a world where the artificial intelligence is trained up on a dataset (like our articles) and then serves up a response lacking citations back to original sources.

In today’s SEO world the digital edition demonstrates to web crawls that ProAssurance is a leading source of expertise in the medical professional liability industry, which then increases the likelihood of our results appearing high on the results page. The analytics tools tell us exactly what articles people read the most and how much time they spend reading them or exploring an interactive data graph. We then use this information to align future content decisions with what you, our audience, is interested to learn about—or in the selection of the themes we build our monthly editions around. When some decisions are not clear we are able to A/B test some elements in the electronic distribution for a more informed choice.

ProVisions Magazine

For those reading the printed-and-mailed version, digital is the future but the hard copy will stick around a while. Last year I mounted a twelve-pocket display on a wall in the ProAssurance Birmingham office and loaded with a year’s worth of issues. Even though office traffic is down to about 30% of pre-pandemic levels, the wall needs frequent re-stocking. Our Business Development team often finds ProVisions MORE useful than a two-sided brochure in an agent or client meeting and team members more generally to keep up with industry and company news. Plus, the Creative Services team puts so much talent into the covers that the displays make an impressive set piece.

What’s not different is that we remain interested in being carrier of choice for our distribution partners. Whatever helps us mutually sell or renew more good accounts is what I’m for—with no ego in the matter of protecting however we used to do things in the past. I’m fairly certain you value ProVisions; at least that’s what you all say when I ask. Plus every time we hire a Business Development representative or Underwriting team member from a competitor they tell me how much they (begrudgingly) liked it.

However, there are always ways to improve—from the selection of themes or articles, to the online digital experience, to how it comes to you, and more. Any feedback you have on how we can improve ProVisions is welcome and appreciated. Let us know by emailing the Marketing team at AskMarketing@ProAssurance.com or contact me directly, SteveDapkus@ProAssurance.com.  

Steve Dapkus

 

News & Updates
483 Hospitals with Five Stars from CMS

CMS updated its Overall Hospital Quality Star Ratings for 2023, awarding 483 U.S. hospitals with a rating of five stars as of July 26. This year, 54 more hospitals were given 5 stars than in 2022.  

CMS annually assigns star ratings to hospitals nationwide based on their performance across five quality categories: safety of care, mortality, patient experience, readmission rates, and timely and effective care. (Becker’s Hospital Review) 

Read more →
U.S. News’ Best Hospitals for 2023-24

In 2023-2024, U.S. News' Best Hospitals ranked hospitals in the U.S. News in 15 adult specialties as well as recognized hospitals by state, metro, and regional areas for their work in 21 more widely performed procedures and conditions. Of the nearly 5,000 hospitals analyzed and 30,000 physicians surveyed, only 164 hospitals ranked in at least one of the specialties. (U.S. News) 

Read more →
The Biggest Malpractice Cases of 2023: States are Shifting the Legal Landscape

Although we’ve only recently crossed the halfway point, 2023 has already seen some headline-grabbing malpractice cases and some changes to malpractice law. Malpractice has been in the news this year, from record-breaking jury awards and serious criminal allegations to changes in how malpractice is filed or compensated in some states. Read on to catch up on it with our 2023 highlights and data roundup. (MD Linx) 

Read more →

Recent Rate Changes Effective 8/1/2023 

We are committed to responsible pricing that reflects the current risk environment. In keeping with our commitment to apprise you of developments within your market, we would like to share with you our recently updated rate strategies for Oklahoma, Kentucky, and Texas. Upon recent review of our rate plan and rating factors, it was determined that the following changes may impact NORCAL insureds:   

OKLAHOMA  

  • Increased premium charge for vicarious liability for each healthcare professional not individually insured on the policy  
  • Update to Per Exposure Rating Factors  
  • Updates to who is eligible for the Part-Time Discount and the amount of discount available  
  • Updates to the New-to-Practice Discount  
  • Updates to the Claim-Free Discount  
  • Elimination of the Group Size Discount  
  • Rule change for Suspension of Coverage  
  • Update to Surcharge Program  
  • Updates to medical specialties and classes, including correction to two specialties (Gastroenterology – Minor Surgery; Gastroenterology – No Surgery)  

KENTUCKY  

  • Overall rate impact of 10.2%  
  • Increased premium charge for vicarious liability for each healthcare professional not individually insured on the policy  
  • Updates to medical specialties and classes  
  • Revised Suspension of Coverage rule 

TEXAS  

  • Overall rate impact of 3.3%  
  • Revised limits of coverage factors  
  • Elimination of the Shared Corporation Limit Charge  
  • Increased premium charge for vicarious liability for each healthcare professional not individually insured on the policy  
  • Updates to medical specialties and classes  
  • Updates to who is eligible for the Part-Time Discount and the amount of discount available  
  • Updates to the New-to-Practice Discount  
  • Elimination of the Group Size Discount  
  • Revised Suspension of Coverage rule  
  • Update to Surcharge Program  

These changes, which have been filed and approved, went into effect August 1, 2023, and are applicable to new and renewal accounts. We will notify affected policyholders of the changes.   

Ties that Bind updated Banner

Keeping the Promises You Don't Make

TTB Quote August 2023

Attention to detail and meeting or exceeding client expectations are crucial aspects of business in the healthcare industry. Keeping commitments made to clients is vital, but what about promises not explicitly made? 

Healthcare professionals communicate with dozens or even hundreds of people daily through spoken, written, and digital means. Despite a constant effort toward clear communication, misunderstandings still occur. 

On the day I was hired for my first medical sales job, my new boss, Jeff, said, "The only thing that really matters in this business is integrity and wisdom. Integrity means that when you promise a customer something, you keep that promise, even if it costs you money. Wisdom means not making such promises." 

Little did I know how this would be a prologue as I began my medical sales career. 

I celebrated my first day in the territory by stopping at an office supply store to purchase an imitation leather executive portfolio briefcase. After ripping off the tags, I shoved in a bunch of product brochures and headed out for some sales calls. 

The first two calls went as planned; I met the doctors and introduced myself. On the third call, however, the receptionist threw me a curveball. She said the doctor only sees sales reps by appointment, and the only way to book an appointment was to leave a product brochure for the doctor. If he’s interested, they’ll call to set up a meeting. I reached into my new briefcase, grabbed a brochure, and handed it to her. She stapled my business card to it, and I left. 

The following week, I received a call from the same receptionist. She said the doctor would meet with me and asked me to bring what was in the brochure. 

He was interested! I was pumped. 

When I met the doctor, I introduced myself and began my sales presentation. He stopped me almost immediately. 

"I’m not interested in that. I asked you to come in so I could get one of those free briefcases." Confused by the doctor's comment, I responded, "I don't understand." 

The doctor held up a brochure with my business card stapled to it, and it was for a briefcase—my briefcase. Instead of giving his receptionist a product brochure, I handed her the glossy paper insert that was packaged with my new briefcase to describe its features. 

I was about to explain my mistake to the doctor when I heard Jeff's words replaying in my head: 

". ..keep that promise, even if it costs you money." 

Realizing the misunderstanding was my fault, I said, "Of course. I'll bring you one tomorrow." 

By leaving the wrong brochure, I created an expectation for a free briefcase. I should have just confessed the mistake and hoped the doctor would have laughed it off as an innocent mistake by a rookie rep. If it happened today, I would have no choice but to explain since such gifts violate compliance guidelines. 

Keeping promises you didn't make may seem like a strange concept, especially in an industry where almost everything is documented in writing. But misunderstandings and miscommunications still occur. When they do, addressing them with integrity is essential, which may sometimes mean delivering on an implicit promise (provided doing so is legal and ethical). 

Always set clear expectations, ensure clients understand them, and honor them, even if it costs you time or money. As my old boss, Jeff, said, "The only thing that really matters in this business is integrity and wisdom," and that's a motto we should all strive to live by. 

Headshots10

 

Written by Mace Horoff of Medical Sales Performance.

Mace Horoff is a representative of Sales Pilot.  He helps sales teams and individual representatives who sell medical devices, pharmaceuticals, biotechnology, healthcare services, and other healthcare-related products to sell more and earn more by employing a specialized healthcare system.

Have a topic you’d like to see covered? Email your suggestions to AskMarketing@ProAssurance.com.

 

 

Midwest Regional Council Meeting

ProAssurance’s Regional Executive Teams launched the Regional Agency Council meetings in August 2023. Each regional team will meet with their agency partners and their partners’ account teams on an annual basis. These events will provide the opportunity for Regional Executive Teams including Underwriting, Claims, and Risk Management to meet with their regional agency account teams to discuss industry trends, ProAssurance progress, and network.

The 2023 meeting schedule kicked off with the Midwest Regional Agency Council who gathered on the Sheraton Grand Chicago Riverwalk. Many thanks to all who attended.

Midwest Meeting 1
Midwest Meeting 2
Midwest Meeting 3
Midwest Meeting 4
Midwest Meeting 5
The Difference