Home > Property & Casualty > PPACA changes elevate nurse practitioner risk profile

PPACA changes elevate nurse practitioner risk profile

nurse_ppaca_op-edOver the years, the medical professional liability insurance market has seen its fair share of price increases.  For instance,  in December, 2001, St. Paul Insurance announced it would exit the market, leaving over 750 hospitals, 42,000 physicians and more than 70,000 allied professionals without an incumbent market. The ramifications of this event were felt by every medical professional in the country. At the same time however, it offered insurance carriers an opportunity to grow in what was an otherwise untapped and limited marketplace. As a result, healthcare providers began seeing rates rise and fall, depending on risk classification, location and claims history.

Since then, the medical professional liability insurance market has remained somewhat unpredictable. The passage and implementation of PPACA might be another one of those “events” that brings around a less subtle, but no less significant, change in the medical professional liability insurance market. From all that we have seen, PPACA is likely to cause big changes in the way that health insurance is provided, delivered and purchased. And while this raises numerous issues for consumers, carriers and brokers in the employee benefits sector, the impact on the casualty sector of the insurance community may be equally significant.

Among those directly affected by PPACA’s implementation are nurse practitioners (“NPs”). According to the International Council of Nurses, an NP/advanced practice registered nurse is “a registered nurse who has acquired the knowledge base, decision-making skills, and clinical competencies for expanded practice beyond that of an RN, the characteristics of which would be determined by the context in which he or she is credentialed to practice.”  In short, this means a nurse who is seemingly taking on a greater role in the primary medical care of the patients of a practice. I suspect many of you have gone to your doctor and had the majority of your care, either routine or diagnostic, completed by an NP.  In 1999, there were approximately 60,000 NPs.  Today, there are over 170,000. In nearly 20 states, NPs can work independently from a physician. On a national scale, NPs had more than 900 million patient visits in 2012. That equates to about three patient visits per hour. From a liability standpoint, this translates to an increased risk profile for these professionals. It also means that underwriters may increase rates and charge higher premiums to compensate for these additional exposures. This holds true for both commercial and alternative risk (read captive and risk retention groups) markets, with the possibility that rate increases could jump anywhere from the single digits to up to 50 percent. That’s the kind of range fluctuation the medical community felt after St. Paul’s exit in 2001.

As PPACA changes the way the medical community allocates  resources (and subsequently allows more individuals to obtain coverage)  the use of NPs will likely increase.  As noted above, this elevates the risk profile for these entities and the medical professionals therein. Coupled with the increased dependence on NPs, the only logical outcome at this time is to expect a surge in rates charged for NPs in almost every corner of the country. Only time will tell how this process “shakes out”, but if the past is any indication of how the market will react, we’re likely to see at least a decade of uncertainty in pricing.

About the Author Pete Reilly is the Healthcare Practice Leader at WGA with extensive knowledge in healthcare systems, including hospitals, long-term care facilities, and medical practice groups of all sizes.


617.692.0256 | PReilly@wgains.com | Connect with Pete on LinkedIn Follow Pete @MedMalInsGuy


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