Medical Director for a Skilled Nursing Facility? Some Points to Consider…
Originally Published February 2012 in The Exchange – Issue 1
It is common for physicians to act as medical directors for skilled nursing facilities (SNF), particularly when physicians have a large number of patients in residence at a facility. Physicians may erroneously believe that their liability exposure as medical director will be low if a claim for substandard care is brought against the SNF.
Recently, MIEC has seen an increase in the number of lawsuits in which a physician is named as a defendant being sued in his/her capacity as a treating physician and as medical director of a SNF. In addition to causes of action for direct patient care, causes of action for responsibilities of the medical director are pled. Allegations often include negligent supervision of the nursing staff, failure to set standards for quality of treatment, and negligent participation in the formation of policies and procedures. Medical directors have been blamed for failing to act if they were aware that a facility received citations for problems with staffing or patient care. Elder abuse allegations are also part of these lawsuits. Many physicians are unaware that if elder abuse is found by a jury, a plaintiff is entitled to “enhanced damages” including attorneys’ fees, and statutory caps on non-economic damages (e.g., California’s MICRA cap of $250,000 for pain and suffering) do not apply. Punitive damages, which are not covered by the physicians’ professional liability coverage, also may be claimed.
Physicians may feel protected by a contract with a skilled nursing facility which purports to indemnify the health care providers for any acts or omissions as medical director. Unfortunately, a recent MIEC case proved this is not always true. The physician was sued in his capacity as treating physician and medical director of a SNF. The nursing home’s insurance company denied coverage to the physician citing an extra-contractual exclusion. Despite the physician’s understanding that he was covered in his medical directorship role, he was not. It is important to note that MIEC’s policy specifically excludes coverage for liability imposed as a medical director. As a result, physicians may face personal financial exposure if found negligent in their role solely as medical director, despite their good faith understanding that they are insured by the SNF.
Too often the SNF’s insurance policy has gaps or critical limitations in insurance coverage. A physician may be unaware that the policy limits for a facility are $1 million. In claims where elder abuse, egregious neglect and failure to meet nursing standards are alleged, this $1 million limit may be insufficient for the damages claimed. Plaintiffs will sometimes include allegations against an individual physician in his/her capacity as a treating physician to expand the amount of insurance coverage available for the claim. If that physician is also the medical director of the defendant facility, thereby having dual roles, it may be difficult for MIEC to extricate the physician from the lawsuit even if the primary allegation in the claim relates to SNF’s substandard nursing care and not the physician’s direct patient care.
Several multi-million dollar verdicts levied against SNFs have recently been reported which may have prompted the increase in elder abuse and skilled nursing facility claims: a $29 million dollar verdict in May 2010 against a Rocklin, California, nursing home (Tanner, et al. vs. Horizon West Healthcare Inc, et al.) in which a jury held the SNF liable for elder abuse as well as understaffing; and a $677 million verdict in July 2010 against a skilled nursing company (Lavender vs. Skilled Healthcare Group) that owned 22 facilities in California and was found liable for improperly staffing all these facilities. While neither of these cases involved individual physicians when the verdicts were ultimately rendered against the facilities, they do provide insight to the current jury view of skilled nursing facilities where neglect of a patient is found. Defense of a physician attached to one of these facilities as a medical director would have been difficult under the best of circumstances.
Protection of our policyholders remains MIEC’s primary goal. If you are presently a medical director for a skilled nursing facility, review your contract keeping these points in mind:
- Does the contract specifically have an indemnification clause?
- Do you have a copy of a Declaration page with your name as an additional insured for the facility?
- Do you clearly understand your duties as the medical director?
- Has the facility ever been cited by state regulators?
- What were the cited violations and were they remedied?
If you have questions about your contract or relationship with a skilled nursing facility, contact Underwriting or Claims at MIEC for further assistance.