When utilized appropriately telemedicine can enhance interactions among providers to improve patient care, support provider-to-provider training, expand service capacity, and enable physicians to manage patients with multiple chronic conditions from a distance by remotely monitoring patient health and activities (source 7). Telemedicine is not new, but with the emergence of COVID in 2020 the utilization of telemedicine exploded. The trend lines indicate that the use cases will continue to expand as will the patient base that has grown accustomed to the delivery model.
- According to the American Medical Association, telehealth visits increased from 840,000 in 2019 to 52.7 million in 2020 during the height of the COVID-19 pandemic. As the pandemic began to fade in 2021, 37% of adults were still utilizing telemedicine.1 By the end of 2022, telemedicine usage stabilized to account for around 10% of visits post-pandemic compared to just 1% prior to the pandemic.3
- Behavioral health remains the leading specialty in telemedicine adoption, with 57% of all outpatient visits delivered via telemedicine. Around 10% of primary care and 5.8% of medical specialty visits are conducted via telemedicine, illustrating that providers are consistently integrating telemedicine into their care models. Over the coming years, baseline adoption rates are likely to be driven higher as providers continue to experiment with additional use cases and patients gain increased comfort and familiarity with telehealth. 3
- Younger adults (18–44) are the most frequent telehealth users, accounting for 15% of total outpatient visits while older adults (65+) are the least frequent users, accounting for just 5% of total outpatient visits.3
POSSIBLE COVERAGE ISSUES CREATED BY TELEMEDICINE & HOW E&S CAN HELP
Utilizing telemedicine has clear advantages, but it also expands existing exposures while offering new unique risks, including:
Venue Issues. Telemedicine has opened up the ability for providers to cross state lines in their delivery of healthcare to a more geographically diverse patient base. At times this can prove problematic for admitted insurance carriers that may, for instance, feel comfortable if an insured offers telemedicine to their existing patient base, but not necessarily to new patients in new states. Excess and surplus (E&S) carriers are often more amenable to offering insureds the geographic flexibility required by providers focusing on telemedicine as their primary delivery model. Expertise in risks when working in multiple states is also required to alert the insured to issues that may arise from expansion into a state where a voluntary or mandatory Patient Compensation Fund (PCF) applies, and what types of solutions can be provided in those venues.4
Majority of Care Provided by Non-Physician Staff. Medical staff, and in particular physician staff shortages in various specialties, have been a topic of concern in healthcare for years. In 2023, integrating telemedicine technology is viewed as an important tool to help alleviate nagging staffing challenge for independent providers, healthcare systems, and others in healthcare. Expanding access to care via telemedicine often means non-physician providers are offering the same level of care that would normally be provided by a physician in an in-person setting, which may increase medical malpractice exposure. Some insurers may be less comfortable with this staffing model while E&S carriers generally have a higher tolerance for this type of risk due to their experience writing similar risks such as urgent care clinics when care was confined to brick-and-mortar operations.
Privacy / Cyber Liabilities. While telemedicine can enhance communication between healthcare providers and patients, it also carries a high risk of cybercrime. Hackers use malware to hold data hostage through ransomware and steal patient data to sell on the black market. In fact, healthcare is the most commonly targeted industry in the U.S. when it comes to cyberattacks. Criminal hacking is now the leading cause of healthcare data breaches.5 According to the Department of Health and Human Services, in 2022, approximately 700 major health data breaches affected nearly 59 million individuals. The breach patterns seen in 2022 emphasize the importance of thinking beyond known risks and implementing strong information security and data protection measures. That also means healthcare providers need to evaluate their insurance coverage around telemedicine to ensure it can respond appropriately in the event of a cyberattack.6 Often, if medical malpractice carriers address privacy/cyber coverage, it is with small sublimits. However, as part of their policy form, some E&S carriers can include higher limits for cyber/privacy.
Technology E&O. The proliferation of technology platforms has enabled telemedicine to affect various aspects of healthcare, expanded advertising capabilities, and enabled providers to reach different patient populations that in-person treatment doesn’t always allow. Depending on an insured’s business model, it could also create the potential for claims that may not be, and often are not, addressed in a standard policy form. For some risks, a claim may assert a financial loss component for problems resulting from technology platform malfunctions. However, many current admitted carrier policies only contain a bodily injury trigger for a claim. Some insurance providers have the capability to include an Errors & Omissions (E&O) trigger for financial loss, but most of those carriers are E&S carriers.
FUNDAMENTALS OF A STRONG SUBMISSION
Agents have the dual mission of communicating insureds’ evolving coverage needs while also capturing all appropriate data to tell the insureds’ story in a way that allows underwriting to be comfortable with a risk. To accomplish this goal, avoid multiple points of contact with an insured while accumulating submission information, and ultimately positively impact the underwriting process, it’s wise to discuss the following when developing a submission:
- Note which companies physicians contract with, where patients are being seen, and where healthcare providers are licensed. Providing a percentage breakdown by state of where care is provided as well as a breakdown by modality for a multi-specialty practice is extremely helpful in outlining to underwriters where claims may emerge.
- If there are multiple physicians on a policy, detail the insured’s credentialing processes to illustrate how the practice ensures it’s employing appropriately qualified staff. The details of the credentialing process can help make an underwriter much more comfortable with the safeguards for staffing instituted by the insured.
- Underwriters will require confirmation of the overall revenue numbers as well as annual patient encounters for an insured. Newly formed risks provide those in the form of projections for the next 12 months while existing companies and providers supply both the projected figures as well as the figures for their last 12 months of operations.
- When telemedicine is at play, submissions should also detail who is responsible for managing and maintaining the telehealth platform, including whether or not it’s a third-party or in-house team.
- Providing 5-7 years of currently valued loss history is also important to giving underwriters a comprehensive view of the risk an insured presents.
CRC Group brokers are available to provide agents with the right applications to help capture the necessary information. Agents can also set clients’ minds at ease by explaining that pricing is generally parallel with non-telemedicine coverage and insureds do not typically see an increase in premium based solely on the delivery model. However, premium will likely be higher when initially transitioning from an admitted carrier to the E&S marketplace.
Telemedicine services can broaden access to care and improve efficiency; however, it also impacts the risks healthcare providers face.1 Expertise matters when accessing the right markets, especially when dealing with changing regulations and treating patients across state lines. CRC Group is home to healthcare liability specialists with the deep expertise agents and insureds rely on to protect themselves in the evolving healthcare environment. Additionally, CRC Group coordinates with an AM Best A-XV rated market partner to help meet the particular insurance needs of telemedicine risks, providing in a single policy form coverage for the major and interconnected exposures of telemedicine risks including:
- Medical Professional Liability
- General Liability
- Cyber/Privacy Liability with ability to add Tech E&O
By grouping these coverages together in one policy form we seek to alleviate concerns about coverage gaps while simultaneously providing updated policy provisions to better suit the needs of telemedicine businesses and providers. One carrier, one policy form is simpler and safer. Reach out to your local CRC Group producer today for more information.
- Telemedicine And Telehealth In 2023 And Beyond: From Leveling Out To Leveling Up, Forbes, December 27, 2022. https://www.forbes.com/sites/forbestechcouncil/2022/12/27/telemedicine-and-telehealth-in-2023-and-beyond-from-leveling-out-to-leveling-up/?sh=7eae43b85484
- Digital Health Technology-specific Risks for Medical Malpractice Liability, National Library of Medicine, October 20, 2022. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9581762/
- Telehealth Establishes Permanent Role in U.S. Healthcare Delivery According to New Chartis Research, Cision PR Newswire, November 8, 2022. https://www.prnewswire.com/news-releases/telehealth-establishes-permanent-role-in-us-healthcare-delivery-according-to-new-chartis-research-301670735.html
- Basics of Patient Compensation Funds By State, Gallagher Healthcare, April 29, 2015. https://www.gallaghermalpractice.com/blog/post/basics-of-patient-compensation-funds#:~:text=How%20Do%20Patient%20Compensation%20 Funds,fund%20works%20with%20this%20insurance
- 5 Tips for Reducing Cyber Security Risk in Telemedicine, Ultra Risk Advisors. https://ultrariskadvisors.com/5-tips-reducing-cyber-security-risk-telemedicine/#:~:text=While%20telemedicine%20can%20enhance%20communication,sell%20on%20the%20black%20market
- Analysis: Third-Party Health Data Breaches Dominated in 2022, Bank Info Security, January 10, 2023. https://www.bankinfosecurity.com/tally-analysis-a-20898#:~:text=In%202022%2C%20some%20701%20major,affecting%20500%20or%20more%20individuals
- Telemedicine: Decreasing Barriers and Increasing Access to Healthcare, Altarum Healthcare Value Hub, November 2017. https://www.healthcarevaluehub.org/advocate-resources/publications/telemedicine-decreasing-barriers-and-increasing-access-healthcare