Some LeadingAge Kansas members may not be aware that care rendered by license types other than NF, AL and RHCFs cannot be covered by Basic or Health Care Stabilization Fund (HCSF) professional liability insurance. A separate professional liability policy will be required.
In the past month or so, I’ve encountered more than one senior living organization that was rendering care not covered by professional liability insurance. It’s not that difficult for good operators to find themselves in this tough position.
Background: The 2014 Legislature’s enacted HB 2516. This amended the definition “healthcare providers” (KSA 40-3401) to include; Nursing Facilities, Assisted Living Facilities and Residential Healthcare Facilities. This means a few important things for these license holders:
- They are assured protection under the cap limiting recovery of non-economic damages (KSA 60-19a01). SB 311 also provided graduated increases to the cap through 2022. (Note: As of June 14, 2019, the Kansas Supreme Court has struck down the cap on non-economic damages as unconstitutional. The applicability of this decision to medical malpractice events, and especially KSA 40-3401 defined Healthcare Providers, is still in question.)
- These providers are required to maintain a claims-made professional liability insurance policy of at least $200,000 Basic coverage from a carrier authorized to write insurance in Kansas. However, most were carrying professional liability insurance prior to this legal requirement.
- Their participation in the Kansas Health Care Stabilization Fund is now mandated. The HCSF or the “Fund,” provides coverage to defined Healthcare providers in excess of $200,000 Basic insurance for each professional liability claim.
An important Fund compliance requirement is that each individually defined license must independently secure Basic coverage and independently participate in the Fund. Equally important is the exclusivity of coverage to each Fund participant. No participant’s coverage can be shared or otherwise used, by another entity, license or person other than the licensed Fund participant. For example, a nursing facility’s Fund coverage cannot apply to a Medical Director or vice versa. Each is a required Fund participant, and each will need coverage compliance specific to their respective license(s).
In fact, the exclusivity of coverage to individual defined healthcare providers can create a challenge when an organization may possess care licenses that are not defined healthcare providers. If you’ve been told the policy covering your NF, AL or RHCF also covers any of the following license types you may be rendering uncovered care.
- Home Health or Hospice
- Home Plus
- Intermediate Care Facility for IID
- Nursing Facility for Mental Health
Care rendered by these license types, and a few others, cannot be covered by Basic or Fund professional liability insurance held by a Nursing Facility, Assisted Living Facility or Residential Healthcare Facility. A separate professional liability policy will be required.
Something else to be aware of is that many insurance carriers that cover defined healthcare providers will provide a separate, independent limit of insurance for individuals employed by the NF, AL or RHCF. Think CNAs, LPNs, RNs, APRNs, DON, Administrators, Operators, etc. This is an important accommodation because, again, Basic and Fund professional liability insurance cannot extend coverage beyond the facility license itself. It’s a good idea to make sure your carrier is providing separate professional liability insurance for your employees. Otherwise, they are likely not covered.
If you have any individuals used in a contracted capacity, they are typically responsible for their own professional liability insurance coverage. Do you have contracted APRNs, Therapists, Dietary, Activities Director, or even an Administrator on contract? If so, do they know your policy likely does not cover them? It’s a conversation worth having.
Your Medical Director is a defined healthcare provider and just like an NF, AL or RHCF has a license specific insurance requirement. Medical Directors typically come to you with their own insurance in hand.
In summary, the considerable change that occurred on January 1, 2015 may have left your non-defined license(s) uncovered by your NF, AL or RHCF policy. If you believe this may apply to your organization and you would like some no cost, no obligation help, please feel free to contact me or anyone on our team at Conrade Insurance Group. We’ve spent several decades working with defined healthcare providers, along with the Kansas Health Care Stabilization Fund, and would be glad to help make sure ALL of your care is covered.
An additional expert resource available for questions related to this issue is Rita Noll, Deputy Director and Chief Counsel at the Kansas Health Care Stabilization Fund. A special thanks to her for contributions to this article.
Chris Conrade, CIC Rita Noll, JD
Vice President & Risk Consultant Deputy Director and Chief Counsel
Conrade Insurance Group, Inc Kansas Health Care Stabilization Fun
cconrade@conradeinsurance.com rita.noll@ks.gov
888-283-0096
