The new face of medical professional liability

CM&F delivers solutions for non-physician providers

By Elisabeth Boone, CPCU

Whoever said that the only constant in life is change could well have been thinking about the American system of health care delivery. The kindly local doctor who answered the phone himself and packed up his bag for a midnight house call is a distant memory, and so are the days when ill and injured people recuperated at home—which also is likely where they came into the world and later left it.

Not only have the years since the end of World War II seen the rapid growth of hospitals and specialty physicians; they also have witnessed the proliferation of non-physician health care providers, from Nurse Practitioners and Physician Assistants to lactation consultants and postpartum care providers.

Each of these specialties is vulnerable to lawsuits that allege malpractice. Even if a provider ultimately is found not to be responsible, the legal action must be defended; and employed providers, as well as those who act as independent contractors, require professional liability insurance that addresses their exposures.

A pioneer in arranging coverage for non-physician health care providers is CM&F Group, Inc., an independent retail agency and program administrator based in New York City that specializes in this challenging market. Established in 1919, the firm collaborated with the American Nurses Association in 1947 to develop the first professional liability policy specifically for nurses. Until then nurses had been covered under the policy issued to the physician who employed them.

Building on that landmark achievement, CM&F grew to become a leading retailer of individual and group malpractice insurance for health care professionals and created programs for dental hygienists, nurse’s aides, Nurse Practitioners, physical therapists, Physician Assistants, and postpartum care providers. While expanding its involvement in non-physician professional liability, CM&F continued to pursue growth in both personal and commercial lines, including manufacturers and retail outlets.

Today, CM&F operates under the direction of an executive team headed by Richard J.J. Sullivan Jr., chief executive officer, who joined the firm in 1982 and was named president in 1982. He has an extensive background in health care professional liability underwriting and management.

Serving as president is Richard J.J. Sullivan III (Jay), who is responsible for new product development for both the professional liability and commercial lines departments. He is also the director of several malpractice insurance programs and is the firm’s chief marketing executive.

Calvin E.F. Sullivan is CM&F’s executive vice president and chief operating officer. He focuses on health care in the medical malpractice division, particularly Physician Assistants and Nurse Practitioners, and has management responsibilities for the firm’s technical infrastructure.

Other key members of the CM&F management team are Donna Fogelstrom, a 30-year veteran of the firm who serves as vice president of the professional liability practice; and Katherine Nova, vice president of the property and casualty practice, who has a strong brokerage background and manages the firm’s group-related health care accounts.

Covering the bases

Although it is primarily a retail operation, CM&F Group also transacts business on a wholesale basis, which allows it to offer a broad array of solutions for non-physician health care providers.

“We are mostly retail, but over the last few years we have been moving into more of a wholesale posture with certain lines of business,” Richard Sullivan Jr. explains. Adds Nova: “We have increased our wholesale presence mostly with groups of health care professionals like Physician Assistants, Nurse Practitioners, and physical therapists. Sometimes we’ll write a mixed group of allied health care professionals, and we also offer coverage for allied health schools.”

As noted earlier, CM&F was instrumental in creating the first stand-alone professional liability policy for nurses in the 1940s. “That was the primary line we wrote until the late 1980s,” Sullivan says. “We entered the Nurse Practitioner market in 1987 when they were broken out as a separate class. We started writing Physician Assistants in 1997, and subsequently we became active in insuring virtually all of the other classes of allied health care providers.”

Today CM&F offers programs for nurse anesthetists and assistants, clinical research professionals, dietitians and nutritionists, registered dental hygienists and assistants, physical therapists and PT assistants, pathologist’s assistants, perfusionists (pro-fessionals who operate the heart-lung machine during surgeries requiring cardiopulmonary bypass), home health care professionals, doulas (professionals who provide support to women before and during childbirth and also provide postpartum care), lactation consultants, pharmacists and pharmacist assistants, electro-neurodiagnostic technicians, and student nurses and student dental hygienists. Coverage also is available for a number of other health classes. CM&F also insures health care schools and student groups as well as professional health care groups.

New education models

The last 20 years have seen not only the proliferation of allied health subspecialties, Sullivan observes, but also significant changes in the education model, particularly for nurses. “Years ago, the model of nursing education was essentially hospital based and used a practical, hands-on approach with an emphasis on clinical training,” he explains. “Most schools offered two-year RN programs, and often the student nurses lived on site.

“That model morphed into the community college movement, and the preferred model then became the four-year program leading to a bachelor of science degree in nursing combined with an RN,” Sullivan says. “Out of that approach grew the Nurse Practitioner model, which requires an additional two years of study leading to a master of science in nursing.

“In recent years we’ve seen a movement toward the pursuit of a doctorate in Nursing Science for advanced practice nurses; this is somewhat controversial because some in the profession prefer the traditional Ph.D., while some others question the need for Nurse Practitioners to pursue a doctorate at all, and still others are concerned about a negative response among the physician community,” Sullivan comments.

Exposure trends

Within the broad field of allied health care providers for whom CM&F arranges coverages, Sullivan says, the targets for claims and lawsuits tend to be nurses at the RN level and up. “Nurses administer medication—in fact, Nurse Practitioners have prescribing authority in most states and can take the lead in the actual treatment of patients,” he explains.

“This clearly puts nurses and Nurse Practitioners at greater risk than providers at lower levels, like nurse’s aides and nurse assistants, who are almost always employed by a hospital, clinic, or other facility and are covered under the employer’s policy,” Sullivan continues.

“In the 1940s, when our agency first started working with the American Nurses Association, which represents RNs, the agency (ANA) had to convince ANA officials that their members actually did face exposures to loss and should have their own coverage,” Sullivan says. “The long-held view was that nurses would be protected by the malpractice policies held by the physicians or facilities that employed them.

“Ultimately the ANA leadership realized that their members did indeed have exposures that would not be covered by an employer’s policy, and as our society became more litigious, individual nurses started buying the coverage,” he says.

“Years ago, some facilities and physicians argued that nurses and Nurse Practitioners didn’t need their own malpractice policies and should rely on their employers’ coverage,” Sullivan continues. “That allowed the facility or the physician to control the loss settlements and the allocation of responsibility for an incident, which could work to the detriment of nurses and Nurse Practitioners.”

The National Practitioner Data Bank, which is administered by the U.S. Department of Health and Human Services, gathers data on malpractice claims and license-related actions against physicians, dentists, and other state-licensed health care providers, Sullivan explains.

“A nurse who was involved in an incident that gave rise to a malpractice claim and did not have his or her own policy might not know how his or her actions were reported to the data bank, which is checked by prospective employers,” Sullivan says. “Clearly this lack of control could have adverse consequences for a nurse or Nurse Practitioner. The same is true for Physician Assistants.”

Today, Sullivan adds, health care facilities are more likely to view favorably a practitioner who has his or her own malpractice coverage because it provides the facility another layer of defense. Some Nurse Practitioners and other higher-level providers, he notes, work in hospital or clinical settings but function as independent contractors, so they must carry individual malpractice coverage.

“In either case,” Sullivan says, “it’s important to remember that, at the time of a loss, it can be alleged that the practitioner was acting outside the protocols of the facility or physician’s practice in which the practitioner was providing care.”

CM&F offers a malpractice policy for registered nurses and licensed practical nurses that provides worldwide coverage and offers three levels of liability limits. The carrier is Granite State Insurance Company.

CM&F’s malpractice policy for Nurse Practitioners is written on an occurrence basis by MedPro, an A++ rated carrier, and is offered in all 50 states. Limits to $1 million/$6 million are available.

More growth areas

Among advanced providers in the allied health field, CM&F is seeing strong growth in the numbers of Physician Assistants, according to Jay Sullivan. Physician Assistants are licensed professionals who work under the supervision of a physician. Physician Assistants also may be the principal care providers in rural or inner-city clinics where a physician is present for only one or two days each week. Physician Assistants must earn a bachelor’s degree followed by more than two years of intensive education in a medical model that is designed to complement physician training.

“As this profession has grown, so has the number of PAs in our Physician Assistant program,” Jay says. “That’s a direct result of our collaboration with the American Academy of Physician Assistants.”

The CM&F malpractice policy for PAs is written through MedPro on both a claims-made and an occurrence form and is available in all 50 states, with limits to $1 million/$6 million.

Another major growth area, Jay points out, is in-store clinics such as those in pharmacy and discount store chains, which are staffed by Nurse Practitioners and Physician Assistants. “Over the last five years or so, we’ve seen a growing trend for people to seek care in these settings instead of visiting a physician’s office,” he remarks. He agrees with his father that the traditional physician-based model no longer dominates the delivery of health care, and he foresees a continuing expansion of non-physician health care professions like Physician Assistants and Nurse Practitioners.

What’s ahead?

As traditional models of health care delivery give way to new approaches, the Sullivans note, recent years have seen a gradual decline in the number of registered nurses in the United States.

“The RN community as a whole is continuing to age, and fewer young people are choosing it as a profession,” Jay says. “That trend is reflected in our program.”

In past decades a cyclical pattern prevailed in the registered nurse population, with shortages of RNs spurring an increase in demand, followed by an oversupply that reduced demand.

That ebb and flow in the number of RNs is unlikely to continue, the Sullivans believe. “In addition to the aging of Baby Boom-age nurses,” Richard Jr. says, “young women today have a much wider range of career choices than they did in the 1960s, and fewer of them are choosing to become nurses. As nurses age 60 and over continue to retire, a dramatic decline in the number of nurses is expected over the next 10 to 15 years.”

This decline, the Sullivans note, will be more than offset by strong growth in the numbers of Nurse Practitioners, Physician Assistants, and other health care professionals.

From being a pioneer in arranging professional liability coverage for nurses in the 1940s, CM&F Group has evolved to become a respected expert in delivering solutions to an ever-growing array of specialized health care providers. The firm has its finger on the pulse of this dynamic market and is well positioned to continue growing with it.

For more information:
CM&F Group, Inc.
Web site: www.cmfgroup.com