As medical practices and technologies advance, so do the potential risks and liabilities associated with patient care, healthcare, and medicine. These unavoidable risk exposures make medical professional liability (MPL) insurance a crucial requirement for professionals and organizations operating in these domains. To accommodate MPL lines of business, carriers require solutions that can scale to ever-growing demands and adapt to business and legal/compliance requirement changes.
This article explores the intricacies of MPL and examines how policy, billing, and claims solutions can help carriers address the challenges of evolving MPL coverage needs and considerations.
Rising Costs of MPL Claims
According to a recent benchmark report by the American Society for Health Care Risk Management (ASHRM), standard self-insured liability claims are rising at two percent annually, while catastrophic professional liability claims are increasing even more aggressively—as high as 10% in some cases. The report accounted for various factors, including demographics, health system types, and regions. The highly competitive insurance arena and complex healthcare insurance regulatory landscape are creating ongoing uncertainties in the marketplace; these heightened costs and difficulties make it crucial for carriers to thrive without significant transformation.
As MPL claims costs rise, insurance carriers should adopt a claim management solution that enables claims professionals to handle complex claims in one unified solution to offset these difficulties. With a firm handle on the end-to-end claims workflow, insurance carriers can eliminate many of the roadblocks to providing customers with the service levels they need while at the same time countering rising claims costs with improved operational efficiencies.
Increase in Nuclear Verdicts
The overall number of claims may have gone down in terms of care, but catastrophic losses resulting from lawsuits are increasing.
Recent benchmark surveys from the American Medical Association (AMA) revealed that 65% of claims that closed between 2016 and 2018 were dropped, dismissed, or withdrawn; out of the 6% of claims decided by trial, defendants won 89%. However, a rise in nuclear verdicts—oversized judgments/awards influenced by social inflation—is placing new pressures on underwriters and providers. According to Travelers, the average verdict more than tripled between 2015 and 2019, from $64 million to $214 million. These exceptionally high, exponentially increasing jury verdicts/awards can threaten a carrier's viability.
For providers and insurers, claims management software solutions with embedded AI are critical for reducing and eliminating manual efforts that could quickly overwhelm staff and create substantial financial hardships. For example, using machine learning algorithms, insurance carriers can create a litigation propensity model, that can predict the likelihood of litigation for each claim. With early identification, carriers have a greater opportunity to prevent litigation and settle claims earlier.
The Evolving Compliance and Legal Landscape
The intricacies of medical negligence law vary by jurisdiction, and staying compliant requires constant vigilance and monitoring. To this end, an MPL insurance software solution can automatically track and alert on shifting compliance requirements and statutes.
With an insurance solution designed specifically for the MPL line of business, insurance firms can consolidate all their compliance efforts in one platform and manage all lines of business, for all states, via a single interface.
Policy Management Software for MPL
As the insurance and healthcare industry continues to evolve, the importance of underwriting MPL line of business cannot be overstated—especially as the insured's expectations become more stringent. In meeting these expectations, an MPL solution can provide broad capabilities for streamlining the insurance workflow, including:
- Providing new business, renewal, and endorsement quotes and proposals
- Generating invoices, schedules, certificates, and other reporting requests
- Accounting for different coverage types: hospital and medical professional liability, general liability for hospitals, corporations, groups, surgery centers, or individual insureds
- Management of occurrences, claims made, nose and tail policies
Addressing MPL Challenges with Software
With an MPL insurance solution in place, insurance carriers can provide their clients immediate access to comprehensive policy information and reporting. Real-time access also means real-time policy processing—from fully configurable underwriting questionnaires, automated reporting/alerts, and in-built data integrity controls and checks, insurance firms can securely provide all players in the MPL insurance value chain with the data and visibility they need from service representatives and agents to third party administrators (TPAs) and underwriters.
Chat with an expert to see how Ventiv can help your organization streamline its MPL insurance processes.
