purchase tail insurance coverage for employed physicians is hindering them from hiring. Tail coverage continues insurance protection for future claims stemming from when a physician’s insurance policy was in force. Texas Medical Liability Trust’s (TMLT’s) standard tail endorsement is valid indefinitely. SB 894 doesn’t contain any provisions related to tail coverage. Tejas Patel, TMLT senior underwriter, says the cost to pur- chase tail coverage varies based on number of years of liability exposure covered under the endorsement, practice location, practice specialty, and liability limits of the expiring policy. Mr. Patel adds that TMLT liability insurance policies are portable anywhere in the state. He says TMLT insured physi- cians who leave an employed setting “would not have to bear the burden of the tail cost at that time.” “The same TMLT policy … could now follow the physician again wherever he or she chooses to practice next in Texas,” Mr. Patel said. Mr. McBeath is not surprised by the slow uptick in employ- ment under the new law. “TORCH testified before the legislature that we didn’t expect wholesale employment by rural and community hospitals. Per- sonally, the numbers are about what I expected at this point. Some hospitals don’t want to employ physicians because it’s expensive,” he said. Dr. Borgstedte says La Grange, like other small towns and
rural areas, depends heavily on Medicare and Medicaid. The high costs of setting up a private practice can deter some phy- sicians from moving to a small community. “The bill gives hospitals that can afford to employ a great opportunity. Giving hospitals the option to pay a physician a salary; provide office space, staff members, and equipment; and cover liability insurance and overhead costs will benefit our community,” he said. Mr. McBeath says the legislation helps fulfill a moral obliga- tion to rural communities to enhance access to care by remov- ing barriers. “Over the next five years, I think we’ll begin to see more hospitals employ because more physicians, especially young doctors, will want the opportunity,” Mr. McBeath said. Dr. Borgstedte worked as a hospitalist in New York before opening a family medicine practice in La Grange in 2003. “I prefer the office setting, but I learned a lot working as a hospitalist. I think we’ll continue to see more physicians start- ing out as employees before transitioning into independent practice. For rural communities, hospital employment helps take the risk out of hanging out your own shingle,” he said. n
Crystal Conde is an associate editor of Texas Medicine. You can reach her by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email at
crystal.conde@
texmed.org.
Employment resources
TMA has many tools to help physicians examine their career options and to meet the needs of physicians just starting out. A Comprehensive Guide for Physician Employment,
written by San Antonio attorney Mike Kreager, is available for sale on the TMA website, www.texmed
.org/education-employment. The publication helps physicians analyze the risks and benefits of employ- ment, features information about employment con- tracts, and discusses the sale of a medical practice to an institutional employer. A PDF version of the publi- cation is $89 for members and $139 for nonmembers. The hardcopy book is $99 for members and $149 for nonmembers. TMA also offers the Employed Physicians and Contracting Issues webinar for 1 AMA PRA Category 1
20 TEXAS MEDICINE February 2013
Credit™. Visit
http://bit.ly/UpWnPo to access the on- demand webinar, which outlines the benefits of being an independent contractor or employed physician and discusses contract language. The webinar is $59 for members and $99 for nonmembers. The American Medical Association House of Del-
egates approved new AMA Principles for Physician Employment at its 2012 interim meeting in November. The principles cover such aspects of the employee- employer relationship as conflicts of interest, advoca- cy, contracting, hospital-medical staff relations, peer review and performance evaluations, and payment agreement. To read the principles, visit
www.texmed.org/AMA_ Employment.aspx.
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