Glossary of Medical Malpractice Insurance Terms

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Absolute Liability

Liability regardless of fault.

Accreditation Association for Ambulatory Health Care (AAAHC)

An organization that accredits Ambulatory Surgery Centers (ASC) and oversees their compliance with industry standards.

Acuity

The acuity, or level of acuity, is indicative of how critical a patient’s injury or illness is. A patient in long-term, custodial care would be considered low acuity, and a trauma patient with multiple life-threatening injuries would be considered high acuity. The level of medical malpractice exposure will typically parallel the level of acuity; low acuity generates low exposure, and high acuity generates high exposure.

Administrative Defense Coverage

This coverage protects Physicians, Surgeons, and Dentists for legal expenses incurred while defending administrative disciplinary actions, peer review actions, privileges, actions by state licensing boards, and investigations involving billing and coding practices.

Aesthetician

Allied healthcare professional engaged in the care and beautification of the skin of the human body, including massage, exfoliation, the application of cosmetics, and hair removal.

Aggregate Limit

The Maximum amount the Insurer will pay for all of the liabilities incurred for a certain insurance policy in a specific policy period.

Allied Healthcare Professionals

Healthcare providers with specialized training, education, and knowledge who provide direct patient care or complementary patient care. They typically work under the direct or indirect supervision of a Physician, Surgeon, or Dentist. Examples include Registered Nurses, Physician Assistants, and Nurse Practitioners.

Allied Healthcare Professional Liability Insurance

A form of Medical Professional Liability Insurance (MPLI) that protects allied healthcare professionals from potential liability in the performance of their duties.

Allocated Loss Adjustment Expenses (ALAE)

Refers to defense costs that can be directly allocated to an individual claim, such as defense attorney fees, expert witness fees, etc.

Alternative Dispute Resolution (ADR)

Refers to methods of settling disputes by means other than court trial. Such methods are typically less costly and more expeditious than the litigation process. Examples include mediation and arbitration.

Alternative Surgery Center

A type of healthcare facility that specializes in providing surgery, pain management, and certain diagnostic services in an outpatient setting.

American Association for the Accreditation of Ambulatory Surgery Facilities (AAAASF)

An organization that accredits Ambulatory Surgery Centers (ASCs) and oversees their compliance with industry standards.

American Board of Medical Specialties (ABMS)

A nonprofit organization that represents twenty-four medical specialty boards that establish and maintain standards for Physician certification and the delivery of safe, quality medical care by certified Physician specialists.

Anesthesiology Assistant (AA)

Allied Healthcare professional who works under the direction of licensed Anesthesiologists. An AA assists the Anesthesiologist with the administration of anesthesia to patients.

Annual Aggregate Limit

For claims-made carriers, the annual aggregate limit is the maximum amount the carrier will pay for all claims arising from incidents that occurred and were reported during a given policy year. For occurrence carriers, the annual aggregate limit refers to the maximum amount the carrier will pay for all claims arising from incidents that occurred during a given year of insurance.

Assisted Living Facilities

A typed of long term care facility designed for people who need custodial care, but not skilled nursing care. Assisted living facilities provide only personal service that can be performed by someone with limited or no medical training. Assisted living facilities are licensed and regulated at the state level.

Assumed Premium

The consideration or payment an insurance company receives for providing reinsurance for another company.

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B

Bedpan Mutuals

A term used to refer to Physician-owned insurance companies.

Best's Rating

A rating given to insurance companies by the A.M. Best Company, an insurance industry ratings agency. The ratings range from A++ (Superior) to D (below minimum standards). Ratings of E and F are given to companies under state supervision or in liquidation. The ratings reflect A.M. Best's evaluation of an insurance company's financial strength and operating performance relative to the norms of the property and casualty insurance industry.

Bureau of Osteopathic Specialists (BOS)

An organization that establishes and maintains standards of specialization and training or Osteopathic Physician or Dos.

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C

Captive

Insurance companies owned and controlled by a parent company, which exclusively insure the exposures of the parent company.

Certified Nurse Midwife (CNM)

The CNM is a type of advanced practice nurse who is trained to deliver babies and provide care to women before and after childbirth and specializes in the practice of obstetrical and gynecological care.

Certified Registered Nurse Anesthetist (CRNA)

CRNAs administer anesthesia for all types of surgical cases, in collaboration with Surgeons, Anesthesiologists, Dentists, Podiatrists, and other healthcare providers.

Claim

A written notice, demand, lawsuit, arbitration proceeding, or screening panel in which a demand is made for money or a bill reduction, and which argues injury, disability, sickness, disease, or death of a patient arising from the physician’s rendering or failing to render professional services.

Claims-made and Reported

Claims-made and reported coverage requires not only that the claim be made, but also that the Insured must report the claim to the Insurer, during the same policy period.

Claims-made Coverage

A form of liability coverage that is triggered if 1) an event takes place after the retroactive date but prior to the termination of coverage, and 2) the claim is made against the Insured while the policy is in effect.

Claims-made Progression

It describes the fact that the cost of claims-made coverage increases each year during the early years of coverage due to the increasing amount of risk assumed by the Insurer each year of claims-made coverage. See Step Factors.

Claims-paid

This type of coverage is triggered once the claim is actually adjudicated or settled.

Claims Professional

An Insurance professional who investigates claims and determines if losses are covered by an Insurer’s policy. The Claims Professional establishes case reserves, manages litigation, and, if needed, settles the claim.

Claims-reported

This type of coverage does not require that the claim be made against the Insured in order to trigger coverage. Rather, the policy is triggered by submitting a written report to the Insurer of either a claim or incident.

Clinic

A type of healthcare facility that provides outpatient, non-emergency care to patients.

Commercial General Liability Insurance (CGL)

Insurance that provides liability coverage for commercial risks covering liability exposures for all locations and causes of loss, except those specifically excluded or limited within the coverage form or by endorsement.

Comparative Negligence

A defense used in lawsuit when the plaintiff is alleged to have been negligent and, thus, caused or contributed to his own injury. Comparative negligence does not relieve the defendant from liability, but it reduces the amount of damages that may be owed to the plaintiff, in proportion to the plaintiff’s own negligence.

Comprehensive Osteopathic Medical Licensing Examination (COMLEX-USA)

A multi-part osteopathic medical licensing exam sponsored by the National Board of Osteopathic Medical Examiners (NBOME). Osteopathic Physicians must pass the COMLEX-USA before being permitted to practice medicine in the United States.

Conditions

A component of an insurance policy that establishes the responsibilities that the Insured must meet in order for coverage to apply, and may limit or qualify and Insurer’s promises. May be referred to as general rules.

Continuing Care Retirement Community (CCRC)

A type of long term care facility that offers a full range of long term care services, from independent living and assisted living, to nursing homes and skilled nursing facilities, all in one community. Residents can move from one level of care to the next as their needs change. Also called continuing care retirement center.

Continuing Medical Education (CME)

CME consists of educational programs that keep healthcare providers current on the rapid advancements in medicine.

Contractual Liability

Liability arising from the assumption of liability through a contract or agreement.

Credentialing

The process of investigating a Physician’s education, training, past loss experience, and any previous disciplinary actions before granting hospital privileges. Such credentials include education and training, practice history, licensure history, and claims history.

Currently Valued Claims

Means the loss run includes the total of payments and reserves valued as of a recent date.

Custodial Care

Refers to long term care services that can be independently and safely provided by individuals who are not medically skilled or licensed. Generally, a custodial care provider assists individuals who are not capable of performing activities of daily living (ADLs).

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D

Declarations Page

A component of an insurance policy, usually the first page, that provides information about the property, person(s), or activity(ies) that are insured, policy limits, deductibles, and coverages. Also called a Coverage Summary.

Deductible

The portion of a loss for which the Insured is responsible. It may apply to the indemnity payment of defense costs, or both. The payment is typically paid by the Insurer and then collected from the Insured.

Defense and Settlement

A policy provision that describes the Insurer’s obligation for the defense and settlement costs involved in a covered claim.

Defensive Medicine

A phenomenon whereby Healthcare providers are induced to perform diagnostic and treatment procedures, some of which may not be necessary, or avoid high-risk patients, to reduce their exposure to medical professional liability.

Definitions

A sections insurance policy that defines terms that are used throughout the policy.

Diagnosis Related Group (DRG)

Refers to a classification system that groups patients with similar medical conditions. Under the Medicare Prospective Payment System (PPS), patients are classified into DRGs and healthcare providers are reimbursed a fixed rate that is based on the DRG to which the patient has been assigned.

Direct Liability

Refers to claims arising from the healthcare provider’s own acts and omissions in the course of providing healthcare services.

Direct Written Premium

A carrier’s gross premium written, adjusted for cancellations, before deducting any premiums paid or ceded to a reinsurer.

Director

A member of the governing Board of a corporation or association elected by the shareholders or members.

Directors and Officers (D&O) Liability Insurance

Insurance coverage that protects the directors and officers of corporations, and sometimes the entity, against legal judgments, settlements, and related expenses resulting from the allegations of wrongful acts of directors and officers committed in their individual capacities as such.

Dividend

This is a partial return of premium to policyholders. In an inter-insurance exchange, the company’s governing board would normally declare a dividend to be disbursed for a particular state or specialty if the company’s claims and financial experience for one or more past years resulted in funds exceeding those needed to pay the claims for that year or prior years.

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E

Earned Premium

This it the portion of premium that applies to an actual coverage period. Insureds usually pay a calendar quarter or more in advance of the actual coverage period; the advance payment is initially unearned and becomes earned incrementally during the ensuing coverage period.

Emergency Medical Technician (EMT)

An allied healthcare professional that provides care to patients in need of immediate treatment. EMTs stabilize victims before transporting them to healthcare facilities, monitor patients’ vital signs, and administer medication.

Emergency Medical Treatment and Active Labor Act (EMTALA)

A federal law that requires hospitals to provide a screening examination for emergency patients and prohibits hospitals from discharging women in active labor or allowing the transfer of patients who have not first been stabilized, unless the benefits of transfer outweigh the risks.

Employee Benefits Liability (EBL) Coverage

EBL protects an employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the Insured’s employee benefits program. It is intended to cover the administration of employee benefits plans such as group life insurance, profit sharing plans, such as group life insurance, profit sharing plans, workers’ compensation, and Social Security benefits.

Employment Practices Defense (EPD)

A limited form of Employment Practices Liability Insurance (EPLI). Employment Practices Defense provides defense only coverage (does not cover damages) for employment claims brought by past, present, or future employees alleging discrimination, harassment, wrongful termination, and other employment-related claims.

Employment Practices Liability Insurance (EPLI)

Insurance coverage that protects businesses against damages and legal defense expenses resulting from wrongful acts arising from their employment practices including discrimination, sexual harassment, wrongful termination, and other related workplace issues.

Endorsement

A written document attached to the original policy that may add, delete, or modify the provisions of the original insurance policy.

Entity Coverage

A D&O coverage for the organization for claims against the organization arising from the wrongful acts of its directors and officers, or acts caused by the organization itself.

Errors and Omissions (E&O) Liability Insurance

Insurance Coverage designed to protect various professionals and professional organizations from financial loss resulting from errors, omissions, or negligent actions arising from their professional activities.

Executive Indemnification Coverage

Reimbursement coverage that pays the organization for the amounts the organization uses to indemnify its directors and officers for defense, settlements, and judgments when indemnification is required or permitted by law.

Executive Liability Coverage

Coverage for the directors and officers when the organization does not or cannot indemnify them for the costs of defense, settlements, or judgments.

Experience Rating

A method of adjusting premiums according to the Insured’s loss history in prior years.

Extended Reporting Period (ERP)

ERP extends the claims-reporting provisions for a specific time period beyond the policy expiration date, for any claims arising from incidents that occurred after the retroactive date and prior to the expiration of the policy. Also called Tail coverage.

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F

Fair Claims Practices Act

A law that specifies a number of activities that constitute unfair claims practices, such as the misrepresentation of policy provisions, failure to act promptly and reasonably when claims are reported and failure to allow or deny coverage within reasonable time.

Federal Trade Commission Act

An Antitrust Law, which created the Federal Trade Commission to enforce all Antitrust Laws. Section 5 of the FTC Act prohibits unfair methods of competition and unfair or deceptive acts or practices.

First Named Insured

An Insured, typically the primary insurance purchase, who is named in the policy declarations. The First Named Insured has special rights and duties, and also pays premiums and receives return premiums.

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G

Gatekeeper

A primary Care Physician selected by enrollees in a managed care plan to determine the type of treatment and diagnostic exams needed and refer enrollees to specialists, if necessary. This Physician receives a monthly fee from the managed care organization for each enrollee that chooses him as their Primary Care Physician.

General Hospital

A type of hospital designed to deal with many types of disease and injury. Typically, it has an Emergency Room to care for Patients in immediate need of treatment. Also called an Acute Care Hospital.

Geriatric Facilities

Long term care facilities that offer services and exclusively to elderly people.

Good Samaritan Statutes

Describes laws that provide immunity to persons who provide emergency care and treatment to injured persons, with no expectation of compensation. The main purpose of these statues is to encourage healthcare professionals to come to the aid of others without worrying about an MPL exposure as a result of their actions.

Governmental Immunity Doctrine

This doctrine provides that no governmental body can be sued unless it gives its permission to be sued. Also called sovereign immunity doctrine.

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H

Hard Market

A point in the insurance market cycle when there is limited availability because Insurers have become insolvent or stopped writing MPL, or limited affordability because remaining Insurers offer coverage, but at prices that are unaffordable.

Health Insurance Portability and Accountability Act (HIPAA)

A comprehensive law that, among other things, requires healthcare providers to protect the privacy and security of their patients’ medical information.

Health Maintenance Organization (HMO)

A form of managed care organization, which has an exclusive network of healthcare providers. Under an HMO plan, an enrollee selects a Primary Car Physician, also called a gatekeeper, who determines the type of treatment and diagnostic exams needed, and refers enrollees to specialists, if necessary. No coverage will apply is an enrollee goes to a specialist without referral from the gatekeeper. An HMO can be a staff-model, group model, or network model.

HIV Benefit Coverage

An optional coverage that provides financial assistance to Insured’s who become HIV-positive as a result of a work-related incident.

Hold Harmless and Indemnification Agreement

A risk transfers method in which one party assumes, by contract, the liability for the negligence of another party. In the absence of such an agreement, each party would be responsible for its own negligence.

Hospice

A long term facility that provides continuing care for terminally ill or dying patients.

Hospital

A type of healthcare facility that provides a broad range of services, such as emergency care, inpatient care, surgical services (both inpatient and outpatient), outpatient services, maternity care, imaging, nursing, and rehabilitation services, and diagnostic and treatment procedures covering a wider variety of medical specialties.

Hospital Directors and Officers Liability Insurance

Insurance coverage that protects the directors and officers of hospitals and other healthcare organizations, and sometimes the entity, against legal judgments, settlements, and related expenses resulting from allegations of wrongful acts committed in their individual capacities as company directors and officers.

Hospital Professional Liability (HPL) Insurance

A form of MPLI that protects hospitals, long term care, and other types of healthcare facilities against the risks associated with professional liability claims.

Hyperbaric Center

A type of healthcare facility that offers hyperbaric oxygen therapy, which is a treatment that uses pure oxygen to enhance the body’s natural ability to heal.

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I

Imaging Center

A type of healthcare facility that provides diagnostic exams, such as x-rays and MRIs, to image (or see inside) a specific area of a patient’s body.

Income Statement

A financial statement that reports the economic performance of the company using its revenues and expenses for a certain period.

Increase Limit Factor (ILF)

A rating factor applied to a base rate when higher limits are purchased. An ILF adjusts the premium to reflect the increase exposure that exists when higher limits of liability are purchased.

Indemnity Payment

Refers to the payment made to the plaintiff for special and general damages assessed against the insured healthcare providers.

Independent Living Facilities

A typed of long term care facility designed for elders who are able to live independently but prefer to live in an apartment within a senior community or a retirement center. Independent living facilities provide housing accommodations, but not medical care, for elders.

Individual Practice Association (IPA)

An organization of individual Physicians but not medical care that offers its services to HMOs at a discounted rate. IPAs may contract with other HMOs.

Informed Consent

A process whereby a healthcare provider informs a patient of the potential benefits, major risks, and alternatives involved in any surgical procedure, medical procedure, or other course of treatment, and obtains the patient’s consent to proceed.

Innocent Insured Coverage

Protects the Insured from liability arising from the intentional (or otherwise non-covered) acts of another for whom the Insured is legally responsible.

Inpatient Care

Healthcare services that require patients to stay in the hospital overnight.

Insuring Agreement

A provision that defines and describes the types of activities that are covered by the policy.

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J

Joint and Several Liability

If parties are “jointly and severally liable” for a certain obligation, it means that each party is liable to pay the full obligation, regardless of their proportion of responsibility. The party who pays the full obligation, however, can seek from other parties their contribution or share of the liability.

Joint Venture

A partnership between two or more business entities for a specific project or within a specified period.

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L

Laboratory

A type of healthcare facility that uses diagnostic instruments and techniques to analyze blood, tissues, and other medical specimens.

Laboratory Technician

An allied healthcare professional who works under the close supervision of experienced laboratory personnel.

Licensed Practical Nurse (LPN)

LPNs help care for ill or injured people and perform health maintenance duties under the direction of Physicians and Registered Nurses. Most LPNs provide basic bedside care to patients, such as taking their temperature, blood pressure, pulse, and respiration, and applying dressings.

Limits of Liability

Refers to the maximum amount the policy will pay during the policy period. In MPLI, limits of liability are commonly provided per claim, subject to an aggregate limit that applies for the applicable policy period.

Long Term Care (LTC) Facility

A type of healthcare facility that provides custodial care and a wide range of healthcare and personal support services, skilled nursing care, and other services for persons who are not capable of performing daily activities.

Loss Adjustment Expenses (LAE) Reserves

LAE reserves represent the Insurer’s estimate of total losses and expenses, such as defense costs, that have been incurred, but have not yet been paid, for losses that have not been settled or adjudicated.

Loss-free Credit

Premium credit received by MPLI Insureds with better-than-average claims experience or loss history. Also called claims-free discount.

Loss History

Refers to the documentation of prior loss experience; a list of previous claims.

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M

Managed Care Organization (MCO)

An insurance organization that provides managed healthcare professional services to their members through a range of health plan products and services, in exchange for monthly premium payments.

Managed Care Professional Liability Insurance

A form of PLI that protects managed care organizations against the risks associated with professional liability claims.

Management Service Organization (MSO)

An organization that provides management, administrative, and other support services to Physician groups.

Medicaid

A health insurance program funded by the state and federal governments that provides a wide range of health welfare benefits to low-income individuals, including seniors and those with disabilities.

Medical Incident

A single or series of acts or omissions arising out of the rendering of or failure to render professional services by a healthcare provider.

Medical Injury Compensation Reform Act (MICRA)

A California state law that provides for unlimited recovery of economic losses such as past and future medical costs or lost wages, and caps awards for non-economic damages, such as pain and suffering, at $250,000.

Medical Malpractice

The failure of a healthcare provider to meet the standard of care and degree of skill that other healthcare providers would exhibit under similar circumstances, resulting in injury to a patient.

Medical Professional Liability Insurance (MPLI)

An insurance product that offers financial protection to healthcare providers for liability arising from errors and omissions in the practice of their profession.

Medical Records

Documents detailing information about the medical care received by patients from healthcare providers.

Medical Waste Liability

This optional coverage protects Physicians and partnerships from the liability of those responsible for disposing of medical and hazardous wastes. Typically, coverage includes bodily injury, clean-up, preventive action, and defense costs.

Medicare

A health insurance program, funded by the federal government, for qualified citizens at least 65 years of age and for individuals below 65 years of age who have disabilities.

Medical Spa (Medi-spa)

A type of healthcare facility that integrates medical care, including Botox injections or cosmetic procedures, with traditional spa services, such as massages, facials, manicures and pedicures.

Miscellaneous Healthcare Facilities

Healthcare facilities, other than hospitals, that provide specialized services for a variety of medical conditions and healthcare needs.

Miscellaneous Healthcare Facilities Professional Liability Insurance

A form of MPLI coverage that protects various healthcare facilities, other than hospitals, from financial losses resulting from claims for medical malpractice against the facility itself or its employed healthcare providers.

Moonlighting

The practice of performing healthcare services beyond the scope of healthcare professional’s formal employment, for other healthcare professionals or organizations.

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N

New to Practice Discount

Premium credit for MPLI coverage received by new to practice Physicians. Typically, these Physicians have just completed their residency or fellowship training.

Non-assessable Insurance Policy

If an insurance policy is non-assessable, the Insurer cannot assess its policyholders for additional capital contributions if the company has poor underwriting results.

Non-economic Damages

Refers to compensation for the plaintiff’s physical, mental, and emotional pain and suffering. Also called general damages.

Notice of Claim

A letter from the patient or his Attorney notifying a healthcare provider of the intent to sue. This can be in the form of a letter or notice that a lawsuit has already been filed, the form for which may be specified by applicable state law.

Nurse Practitioner (NP)

NPs are Registered Nurses who have completed more advanced education with extensive clinical training. They obtain health histories, perform physical examinations, monitor patients, order and interpret laboratory tests and x-rays, provide health education, and, in some states, may write prescriptions.

Nursing Home

A type of longer term care facility that provides comprehensive custodial care to residents, as well as basic skilled nursing care services.

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O

Occupancy Rate

Computed by dividing the number of occupied beds by the cumber of licensed beds, and then multiplying by 100.

Occupied Beds

The primary exposure unit for hospital professional liability. This number measure the number of patients actually cared for by the healthcare facility and, therefore, the hospital’s exposure to MPL.

Occurrence Coverage

Provides coverage based on when the accident or injury actually happens; thus, claims arising from injuries that occurred within a policy’s effective dates are covered by that policy, regardless of when the claim is actually made against the Insured or presented to the insurance company.

Osteopathic Physician

A physician who holds a Doctor of Osteopathy (DO) degree. DOs practice a holistic approach to healthcare instead of treating specific illnesses. Dos focus on the musculoskeletal system and promote the body’s natural tendency toward self-healing.

Outpatient Services

Include minor medical procedures, surgeries, or tests that are completed without the need for the patient to stay in the hospital overnight.

Outpatient Visits

Refers to the number of patients who receive outpatient (i.e. not overnight) services at a hospital.

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P

Part-time Discount

Premium credit received by applicants for MPLI coverage for part-time practice, since they present a lower exposure than healthcare workers working a full 40-hour workweek.

Patient Safety

The prevention of healthcare errors and the elimination or mitigation of patient injury cause by healthcare errors.

Payor

Refers to organizations that pay for healthcare services, such as Medicare and Medicaid, private health insurance companies, and uninsured patients.

Pediatric Facilities

Facilities that provide services exclusively to children.

Peer and Quality Review

A part of the credentialing process used by hospitals to evaluate and measure the competence of Physicians, and monitor and document their performance and decision-making abilities. Peer reviews are part of the credentialing process, and are performed by peer review committees made up of other Physicians.

Per Claim Limit

The maximum amount the Insurer will pay for each claim covered by the policy. The per claim limit may apply to damages only, or to both damages and defense costs.

Pharmacist

An allied healthcare professional who dispenses drugs and medications and counsels patients about potential medication reactions.

Physician

Physicians are healthcare providers with extensive education and training that are licensed to practice medicine.

Physician Assistant (PA)

An allied healthcare professional licensed to practice medicine under a Physician’s supervision. A Physician Assistant’s responsibilities may include conducting physical exams, making diagnoses, and treating illnesses.

Physician Extenders

A group of allied healthcare professionals that provides hands-on care with little supervision. They have a more significant level of MPL exposure than other allied healthcare professional due to the level of hands-on care that they provide.

Physician Hospital Organization (PHO)

An organization composed of a hospital and its Physicians that offers healthcare services to MCOs. The PHO negotiates contracts with MCOs on behalf of the Physicians and hospitals.

Physician Insurers Association of America (PIAA)

An organization representing its member companies, which are Physician-owned malpractice companies, in legislation advocacy efforts and initiating education, risk management, and research programs.

Physician Professional Liability (PPL) Insurance

A form of MPLI that provides Professional Liability Insurance coverage to Physicians, Surgeons, and Dentists.

Podiatrist

A medical specialist who provides medical diagnoses and treatments for foot and ankle problems, including sprains, fractures, corns, and calluses.

Point of Service (POS)

A form of managed care organization that allows enrollees to obtain the services of healthcare providers of their choice. It has a network of healthcare providers, but enrollees are not required to choose within the organization’s network. Enrollees must obtain gatekeeper referral before receiving any diagnostic or treatment procedures or specialist services from a healthcare provider within or outside the organization’s network.

Preferred Provider Organization (PPO)

A form of managed care organization that allows enrollees to choose their own healthcare providers. It has a network of healthcare providers that provide services at discounted rates. It does not require the referral of a gatekeeper.

Premises Liability Coverage

A limited form of Commercial General Liability coverage. Premises Liability provides coverage for bodily injury, property damage, or personal injury arising out of the ownership, maintenance, and use of the Insured’s premises.

Primary Care Physician

In a health plan, a Primary Care Physician is selected by enrollees to determine the type of treatment and diagnostic exams needed, and refers enrollees to specialists, if necessary. This physician receives a monthly fee from the managed care organization for each enrollee that chooses him as their Primary Care Physician.

Prior Acts Coverage

A claims-made policy feature that protects the Insured for claims arising from medical incidents that happened after the retroactive date and before the inception of the current policy for which a claim is not made until after the policy is in force. Under this policy feature, the Insurer will assume the retroactive date established under an earlier claims-made policy.

Prior Known Acts

Refers to claims arising from a medical incident that was known, or should have been known, by the Insured or was first reported to any Insure prior to the inceptions date of the Insured’s policy period.

Private Payors

Refers to private payors for healthcare services, such as private health insurance companies and uninsured patients.

Probable Claim Event

A policy provision that allows an Insured to trigger coverage under its Medical Professional Liability policy by reporting a medical incident that is reasonably expected to later result in a claim. Also called awareness or incident reporting provision or discovery clause.

Prognosis

Refers to the Physician’s opinion of the probably future course of a medical condition.

Psychiatric Hospital

A type of healthcare facility that is primarily engaged in providing medical services for the diagnosis and treatment of mental illnesses.

Psychologist

An Allied healthcare professional who has earned a doctorate degree in psychology, who studies human behavior and psychological health, and assesses and treats individuals with mental illnesses or psychological disorders.

Punitive Damages

Refers to damages awarded to penalize a defendant for grossly negligent, malicious, reckless, or intentional conduct.

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R

Radiologic Technologist

A healthcare professional who performs imaging procedures.

Radiologist

A healthcare professional who interprets diagnostic images.

Reduction for Refusal to Settle

A policy provision that provides that the Insurer will not settle any claim without the consent of the Insured and if the insured refuses to consent to any settlement recommended by the Insure, the Insurer’s liability for the claim is limited to the amount for which the claim could have been settled.

Registered Nurse

Registered Nurses (RNs) are degreed, licensed healthcare providers who care for patients with a significant degree of knowledge, skill, and judgment. RNs observe patients to assess symptoms, reactions to treatment, and progress.

Rehabilitation

A type of healthcare service provided to patients recovering from an illness or injury. Also called convalescent care.

Rehabilitation Center

A typed of long term care facility that provides a variety of therapeutic procedures. Also called convalescent care center.

Reinsurance

A risk management tool that allows Insurers to spread exposures across other insurance companies so that no single Insurer is vulnerable to total financial collapse from unanticipated, severe, or catastrophic losses. The parties in a reinsurance agreement are the Cedant/Reinsured and the Reinsurer.

Renal Dialysis Center

A type of healthcare facility that provides artificial replacement of the lost kidney functions for patients with kidney failure or those waiting kidney transplants.

Residency

Refers to the specialty training under supervision that graduates of medical school undergo.

Residents

Refers to patients in long term care facilities.

Respondent Superior

A type of vicarious liability that holds an employer liable for an employee’s negligent actions. Latin for “let the master answer.”

Retroactive Date Inception (RDI)

Refers to the first year of a claims-made policy, where the retroactive date is the same date as the policy’s effective date. Also called first year claims-made coverage.

Risk Control

This step of the risk management process involves either the prevention of losses or the mitigation of the losses that do occur.

Risk Identification and Analysis

This step of the risk management process includes the identification and analysis of situations or problems that may give rise to events or incidents of potential liability for the hospital and its employees, Physicians, and other healthcare providers.

Risk Management

A systematic approach to identify, analyze, and address potential exposures to financial loss.

Risk Retention Group (RRG)

RRG's are insurance companies owned and controlled by a group engaged in similar or related businesses for the purpose of insuring the liability exposures of its members.

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S

Schedule Rating

A method of adjusting premiums applied when the Insured has a unique risk characteristic that the Underwrite believes makes it more or less likely than average to incur a loss.

Self-insured Retention (SIR)

A specific sum or percentage of loss that is the Insured’s responsibility and is not covered under the policy. Claims within the Insured’s SIR are usually handled and paid by the Insured.

Skilled Nursing Care

Refers to services that can be provided only by skilled or licensed healthcare professionals. Skilled nursing care services include nursing and rehabilitation services. Some examples of skilled nursing care services include taking blood pressure, monitoring patient conditions, and performing physical therapy.

Skilled Nursing Facilities (SNF)

A typed of long term care facility that provides more advanced skilled nursing care than nursing homes offer. SNFs may provide short-term or long-term skilled nursing care and acute or intermediate care.

Social Worker

An allied healthcare professional who counsels patients and their families to assist them in adjusting to physical and psychological difficulties. A Social Worker provides individual and group therapy and social rehabilitation treatments.

Sorry Works

Laws that allow healthcare providers to express sympathy and concern regarding a patient’s injury without it being considered an admission of guilt if there is a medical malpractice action. Also called I’m Sorry Laws.

Sovereign Immunity Doctrine

This doctrine provided that no governmental body could be sued unless it gave its permission to be sued. Also called governmental immunity doctrine.

Specialist

A Physician who has completed residency training in a specialty recognized by the American Board of Medical Specialties (ABMS) or the Bureau of Osteopathic Specialists.

Specialty Hospital

A type of healthcare facility that specializes in a particular medical field, such as cardiology, orthopedic surgery, or rehabilitation.

Staff Model

A form of Health Maintenance Organization (HMO) in which the Physicians are salaried employees of the HMO and treat members exclusively in the organization’s own facilities.

Standard of Care

Refers to the level of care expected from a healthcare provider in similar circumstances who has similar education, background, and training.

Statement of Cash Flow

A report that contains how much cash was either generated or consumed by the company over a certain period of time.

Statutes of Limitations

A law that specifies the amount of time within which a plaintiff must pursue legal remedies.

Statutory Offer

A written offer of settlement by one party to another party, which must be accepted within a specified time.

Surgeon

A healthcare provider educated and trained in performing surgical procedures.

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T

Tail Coverage

See Extended Reporting Period

Teaching Hospital

A type of healthcare facility that provides training programs, including internships, residencies, and fellowships, for Physicians and other healthcare providers, in addition to treating patients.

The Joint Commission

A private, nonprofit organization that was established to evaluate healthcare organizations voluntarily seeking accreditation.

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U

Underwriter

An Insurance Professional who evaluates an applicant for acceptability for insurance coverage and makes sure that applicants are appropriately classified and rated, in an effort to create a profitable book of business.

Uninsurable Exposures

Types of activities that are either within an Insured’s control or are so catastrophic that it is not feasible to provide insurance coverage at an affordable price.

United States Medical Licensing Examination (USMLE)

A multi-part professional exam sponsored by the Federation of State Medical Boards (FSMB) and the National Board of Medical Examiners (NBME). Physicians must pass the USMLE before being permitted to practice medicine in the United States.

Urgent Care Clinic

See Walk-in Clinic

Utilization Review

A process that involves the determination of whether the request for care is “medically necessary,” typically by the managed care organization's utilization review committee.

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V

Vicarious Liability

A doctrine that provides that a party is held responsible for the negligence of another based solely on the relationship between the parties, such as employer and employee or principal and agent.

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W

Walk-in Clinic

A type of clinic that provides medical care for minor emergency cases or for patients who need urgent care. Also called urgent care clinic.

Wrongful Life Action

A claim brought by parents or a child against a Physician for failure to diagnose the fetus’ or mother’s illness in the early stages of pregnancy, preventing the woman from having an opportunity to abort the fetus.

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