Planning Tips from the Health Care Practice Group

In light of the current medical malpractice crisis occurring nationwide, many physicians are considering practicing medicine without having malpractice insurance coverage ("Going Bare"). If you are a physician, practicing in the State of Florida and you are contemplating dropping your medical malpractice insurance coverage you must know and take into consideration the following.


A. KNOW YOUR LICENSING REQUIREMENTS AND FINANCIAL RESPONSIBILITY:

FLORIDA STATUTES - require physicians to meet one of the following obligations in order to obtain and maintain medical licensure:
  1. Obtain malpractice insurance at a amount, not less than $100,000 per claim with a minimum aggregate of not less than $300,000 if the physician does not have hospital staff privileges and $250,000 / $750,000 if the physician has hospital staff privileges;
  2. Establish and maintain an escrow account in the amounts set forth above.
  3. Obtain an irrevocable letter of credit from a financial institution in the amounts set forth above.
  4. With respect to every adverse executable final judgment against a physician, agree to pay:
    a. The lesser of:
    1. The amount of the executable judgment plus any accrued interest, or
    2. $250,000 ($100,000 for physicians without staff privileges); and
    b. "Prominently display" a sign "noticeable by all patients" informing them that the physician does not carry malpractice insurance as follows:

    Under Florida law, physicians are generally required to carry medical malpractice insurance or otherwise demonstrate financial responsibility to cover potential claims for medical malpractice.

    YOUR DOCTOR MEETS THESE REQUIREMENTS AND HAS DECIDED NOT TO CARRY MEDICAL MALPRACTICE INSURANCE.

    This notice is provides pursuant Florida law. (Note: We recommend that the physician also print on their patient intake form for each patient to sign, the same statement appearing on the office sign again informing each patient as to the fact that the physician does not carry malpractice insurance.)

Remember, paying the $100,000 or $250,000 whichever the case may be, does maintain your license but it doesn't make the balance of the final executable judgment go away. Also remember, these minimums are "per occurrence".


B. KNOW YOUR INSURANCE:

Understand your policy, know its exclusions and evaluate whether or not other insurance alternatives exist that may help to lower the premium that you think are just to high to maintain - Make sure your agent has been creative and left no stone unturned in shrinking your policy premium.


C. CONTACT YOUR HOSPITALS AND CARRIERS FOR WHICH YOU ARE A PROVIDER:

Read your provider agreements and contact the provider relations department to determine whether or not giving up your malpractice insurance will terminate your agreement thus significantly impairing your revenue stream.


D. START THE PROCESS TOWARDS DEVELOPING AN ASSET PROTECTION / WEALTH PRESERVATION PLAN:

a. Take inventory of all Corporate and Personal Assets and Liabilities to determine if they are protected.
b. Know what property (tangible and intangible) is exempt from creditors in your state.

Assets Exempt From Creditors in Florida
Homestead Property Florida Constitution, Article X, Sect: 4 and Florida Statutes Sect. 222.01
Wages Florida Statutes Sect. 222.11
Life Insurance Proceeds Florida Statutes Sect. 222.13
Cash Surrender Value of Insurance and Annuities Florida Statutes Sect. 222.14
Cash Surrender Value of Insurance and Annuities Florida Statutes Sect. 222.14
Unemployment Compensation Florida Statutes Sect. 222.16
Disability Income Benefits Florida Statutes Sect. 222.18
Pension, Profit Sharing Florida Statutes Sect. 222.21
Prepaid Education Plan Florida Statutes Sect. 222.22
Tenants by the Entireties Properties Common Law


c. Segregate all accounts (ie: wage, retirement benefits, annuities and life insurance and disability benefits) so as not to co-mingle funds accessible to creditors with those exempt from creditors.


SEE YOUR MALLAH FURMAN PROFESSIONAL TO ASSIST YOU IN THE FORMATION OF YOUR ASSET PROTECTION / WEALTH PRESERVATION PLAN


© 2007, Mallah Furman. All Rights Reserved.  
The CPA licensure designation is regulated by the State of Florida.  
The CVA designation is regulated by the National Association of Certified Valuation Analysts.  
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