HCSF Comments From Chip Wheelen

Chip Wheelen, Executive Director of the Health Care Stabilization Fund, has provided us with the sixth installment of comments on the upcoming changes.  (Don't forget you can view past installments of the newsletter to see previous comments).

 

The third article in this series focused on the provisions of Kansas Statutes Annotated 40-3402. Among other things, K.S.A. 40-3402 stipulates that health care providers defined as such in K.S.A. 40-3401 must purchase their professional liability insurance from “an insurer duly authorized” by the Commissioner of Insurance “to transact business in this state.” In insurance industry jargon, these companies are referred to as “admitted carriers” whereas, excess and surplus lines insurance companies are not admitted carriers. Similarly, captive insurance companies organized by out of state corporations exclusively for the purpose of insuring subsidiaries of the corporation are typically not admitted carriers.

If a nursing facility, assisted living facility, or residential health care facility is currently insured by a company that is not an admitted carrier, one of two things must occur prior to January 1, 2015. Either the insurance company must submit the necessary application and documents to become an admitted carrier authorized by the Commissioner of Insurance, or the facility must obtain a new professional liability insurance policy with a January 1, 2015 effective date that is issued by an admitted carrier. The primary policy must be a claims made policy with limits not less than $200,000 per claim subject to a $600,000 annual aggregate limit.

There may be some facilities that for whatever reason are considered extraordinary risks. If these health care providers are not able to obtain their primary professional liability insurance from an admitted carrier, they are eligible for coverage via the Health Care Provider Insurance Availability Plan. The plan is a joint underwriting association created exclusively for health care providers defined as such in K.S.A. 40-3401. The following information regarding the Availability Plan is excerpted from the HCSF General Information Brochure which can be downloaded from the HCSF website at http://hcsf.kansas.gov/news/Pages/default.aspx.

Obtaining Basic Professional Liability Coverage from the Availability Plan

The Health Care Provider Insurance Availability Plan is one of the principal features of the Act.  Without this Availability Plan, some individual health care providers would not be able to obtain professional liability insurance. Any defined health care provider who has an active license to render professional services in Kansas may obtain basic professional liability insurance from the Health Care Provider Insurance Availability Plan if the provider has been denied basic coverage from the commercial insurance market. 

Any licensed insurance agent should be able to provide assistance in making application to the Availability Plan. At the time this document was published, the Availability Plan was administered by the Kansas Medical Mutual Insurance Company of Topeka, Kansas (telephone 785-232-4740 or 1-800-232-2259).