By MICHAEL R. LOWE, Esq.
Administrative Defense Coverage and/or Administrative Proceedings Defense Coverage: Welcome Addition or Necessary "Evil"?
While most healthcare facilities, group practices, physicians and medical providers have medical malpractice or professional liability insurance, many healthcare providers and professionals are unaware that those policies may include an Administrative Defense Coverage (ADC) and/or Administrative Proceedings Defense Coverage (APDC) provision, add-on or endorsement.
ADC/APDC is coverage that typically covers the legal costs for defending administrative and disciplinary actions by state licensing boards (like the Florida Board of Medicine), peer review proceedings and credentialing actions by a hospital or healthcare facility, and other healthcare regulatory and administrative matters. Examples of matters often covered under ADC/APDC include HIPAA violations and HHS/OCR investigations, patient complaints to state licensing boards, licensing board investigations due to professional liability indemnity payment, investigations or other actions alleging violations of fraud and abuse including compliance with the Stark or anti-kickback rules, Meaningful Use audits, DME audits, Medicare audits and subsequent appeals to Medicare audits, pre-payment and post-payment audits for both public and private insurance carriers, actions by insurance payment programs impacting licensure, participation or contract termination, including Medicare/Medicaid, and/or billing and coding errors.
In some instances, ADC/APDC will also cover civil court actions resulting from conduct as an employer or supervisor in the healthcare practice. Healthcare providers may also have to participate in investigations by federal and state government agencies and can use their administrative defense coverage to pay for these actions which can be very expensive. The coverage can also help pay for out-of-pocket expenses for such matters, including legal expenses, attorney fees and costs, expert witness costs, consultants, court reporter and transcription fees, shadow audit expenses, fines, and penalties, practice interruption expenses, travel to defend, copy costs, and other approved costs relating to the defense of a matter.
Providers and professionals should consult with their insurer or insurance agent to determine what level of coverage you have to ensure you have sufficient coverage to properly protect your professional license. Most ADC/APDC policies have a defense costs limit of anywhere between $5,000 and $100,000 and are included with the medical malpractice insurance and/or professional liability insurance. Some carriers/policies offer the ability to purchase a secondary coverage with increased limits for ADC/APDC coverage through an outside market such as Lloyd's of London, ProLiability, or NAS where gap coverage can be purchased as a wraparound to an existing policy.
Administrative proceedings and litigation such as peer review fair hearings, administrative law judge hearings on the state and federal level, and Medicare appeals can be extremely expensive and stressful. Healthcare professionals and providers should familiarize themselves with their insurance policies to determine if they have ADC/APDC coverage, the amounts of such coverage, and the types of administrative matters that are covered under their policies. Providers and professionals should also consider buying additional wraparound or similar types of coverage in order to increase defense limits so that they do not have to pay legal fees and defense costs out-of-pocket, which could also serve as a disincentive to continue defending against healthcare regulatory and administrative claims and investigations. Simply stated, even if it costs additional dollars to purchase such coverage, healthcare providers and professionals are well served to consider purchasing such coverage which is generally much less expensive than paying for the defense of administrative and healthcare regulatory law investigations and proceedings out-of-pocket.
The Healthcare Team at Forster Boughman Lefkowitz and Lowe work to defend healthcare providers and professionals on all of the potential areas covered by an ADC/APDC policy, as well as with clients, the insurance companies, and agents and brokers to review and advise clients on their policies to ensure they have sufficient coverage to properly protect their professional license. Many ADC/APDC policies have a "choice of counsel" provision that allows the insured to choose what attorney and firm they would like to have represent the insured in a ADC/APDC covered event. Other policies assign attorneys who are on their insurance carrier panel. Florida Board-Certified Health Care Attorney Michael Lowe and Forster Boughman Lefkowitz and Lowe are recognized on several insurance carrier's panels for defense of ADC/APDC matters.
The Healthcare Team at Forster Boughman Lefkowitz and Lowe understand the hard work and sacrifices it takes to become a health professional or provider and aggressively defend health professionals regarding protecting their license, practice, career, assets and reputation. Using our experience and expertise, we navigate the obstacles our clients face, serving not only as their attorneys, but also as their legal strategists, trusted advisors and protectors of their rights and interest against government investigations and lawsuits when necessary, and we help chart a course through the maze of state and federal health care laws, rules and regulations.
As with any overview, this insurance information is general and intended to help you make informed decisions. The actual policies available in your state may contain features not discussed above. There are many variations. Some companies offer hybrid versions of claims made and occurrence policies. Exclusions vary from company to company. It is important to read your policy and understand its terms. If you are switching insurers, make sure the new policy correctly picks up retroactive coverage from the previous insurer. The importance of understanding your coverage cannot be understated. An insurance policy is a contract between you and an insurance company. You should read and understand any policy that you purchase. If you have any questions, have the company or insurance broker or agent take as much time as you need to explain policy terms to your satisfaction.
Michael R. Lowe, Esquire is a board-certified health law attorney at Forster, Boughman, Lefkowitz & Lowe. Mr. Lowe and our law firm regularly represent providers, physicians and other licensed health care professionals and facilities in a wide variety of health care law matters.
For more information regarding health care law and such matters please visit our website www.FBL-Law.com or call our office at (407) 255-2055.