Over the years we have seen, the mistakes home healthcare agencies make when they purchase their home healthcare agency liability insurance, their professional liability insurance for home healthcare agencies  and workers compensation to protect their home healthcare aides. It’s critical that you choose an insurance brokerage firm that specializes in the home healthcare agency space so that you can leverage their collective wisdom. Don’t let your education become too expensive.

With profit margins as thin as they are within Home Healthcare Agencies #1 uncovered liability claim could be fatal to even the best run Home Healthcare Agencies. One area we see many other insurance brokers get wrong when they design the liability insurance program for home healthcare agencies is the professional liability exposure centered around patient transfers.

Moving patients around for bathing, sleeping, and general care is a foundational function for home health aides. You would think that if you purchased a liability insurance program for your home healthcare agency that the patient transfer exposure would be covered, especially for the premiums they charge. Spoiler alert, often times it does NOT.

QUICK NOTE : Insurance carriers understand that neither you the end buyer of the home healthcare agency liability  insurance nor your insurance broker actually read the policies that are placed. Their is way too much focus on the insurance premium, not what the insurance premium spend actually purchased , which is the most critical piece. An equivalent in the physical world would be renting through AirBNB what you think is waterfront property only to find out you’re overlooking a sewage treatment plant. This is how insurance carriers are getting away with denying claims for patient transfers. They get over because they know your too busy to look at the fine print until it’s too late.

SCENARIO : You have an elderly  customer who still likes to get out, is not entirely isolated at home. Part of the job description for this customer is that they expect the home health aide to bring them out shopping for groceries, perhaps a doctors appointment or two. Point is the care provided is NOT limited to the 4 walls of the patients home. This creates a whole other risk profile for you the Home Healthcare Agency owner. This additional exposure should be identified up front , when it is , it’s critical that the Agency charges a “risk premium” for the additional INCREASED exposure this increased care provides.  If the customer balks at the pricing we recommend you walk. This is a whole different subject and article to be addressed later.

CHALLENGE : When it comes to patient care, and potential negligence claims emanating from that care  these should be responded to &  financed within the professional liability insurance policy designed specifically for  home healthcare agencies . Sadly, many of these types of patient transfers occurring outside the home are not covered. Patient transfers, especially when utilizing an auto are specifically EXCLUDED.

We had a situation where the home health aide took a patient grocery shopping. When they were in the parking lot of the store the home health aide began to load the groceries in the trunk of the car. She negligently did this BEFORE first settling the patient, poor process/ training. The patient lost their balance and fell in the parking lot, shattering their hip.

Within months the home healthcare agency was sued by the patient and their family. Fortunately we understood the exposure up front , were made aware this level of care is being provided , making sure it was properly covered by the professional liability insurance. The claim ultimately settled for $680k.

Unfortunately when we are approached by home health care agencies to evaluate their programs we find their current insurance programs specifically exclude patient transfers outside the 4 walls of the home. The difference between being insured for this exact exposure or NOT is usually 2 words. Which (2) words, where is the intellectual capital of a seasoned risk advisor who knows where to look for those (2) words and negotiate them out of the insurance contract before the loss occurs.

If you are curious, and want a second opinion, call (914) 357-8444 or CLICK HERE to stress test your home healthcare agency insurance program BEFORE your education becomes expensive.

TAKEAWAYS: 

  • Understand your potential exposures. You can’t manage what you don’t know. An experienced Risk Advisor in your space will lead you in a discovery interview process that seeks to understand what customer base is, where your customer base is, levels of service you provide , business model and operations. This is where we identify exposures you may have like the patient transfer outside the home example.
  • Stress Test Your Current Program : After you have identified as many potential exposures as you can in the above exercise make decisions on how to mitigate or finance these potential exposures.

    Remember there are only 4 ways to fund a loss:

  • Current Operating Cash Flow
  • Cash Reserves
  • Loans / Credit Line
  • Insurance

For most small to mid-sized businesses , insurance is the most cost efficient way to finance future potential losses.

Our recommendation is to open up a dialogue with a RISK ADVISOR and have them do the work for you. Often the service is free of charge. There is no downside in checking your home healthcare agencies insurance program .

One of two outcomes will result: 

  • You checked the program for BOTH coverage terms & pricing ;  all seems to be in order. Feel good about that.
  • You have uncovered deficiencies in your program that decisions need to be made on, &/or you were being over charged for the coverage.  Often when we evaluate programs we see BOTH adverse scenarios occurring.

In the last few years we have evaluated hundred’s of home healthcare agency insurance programs. We have found coverage deficiencies & pricing improvement opportunities in 84% of the cases we reviewed. Within that 84% cohort 62% had MAJOR deficiencies that could have resulted in the collapse of the Agency should that particular loss occur.

If you are curious, and want a second opinion, call (914) 357-8444 or CLICK HERE to stress test your home healthcare agency insurance program BEFORE your education becomes expensive.

For a quick primer on the different liability insurance policies available for a Home Healthcare Agency CLICK HERE.