Michigan Medical Professional Liability Insurance Market Summary
Doctors in Michigan have several good options for medical liability insurance. The major insurers in the state are:
- The Doctors Company
- Aspen American Insurance Company
- Coverys Group
- Michigan Professional Insurance Exchange
- ISMIE Group
- Medical Protective
These companies have proven to provide robust financial and legal support for doctors, and all have an A-rating from A.M. Best. These carriers use proprietary methodologies to set rates and there is no set standard rate across insurers for each specialty. Michigan physicians traditionally bought policies with limits of $200,000/$600,000, but many are now switching over to higher limits of $1,000,000/$4,000,000. Other unique limit structures ranging from $100,000/$400,000 up to $2,000,000/$8,000,000 may be available as needed.
In Michigan, no single carrier dominates the market, with a few carriers insuring the majority of physicians throughout the state. In addition to the competitive market, providers have experienced a steady and consistent decline in claims.
Like many other states, Michigan experienced a rapid increase in claim frequency in the early 1980s. Between 1980 and 1984, medical malpractice insurance premiums doubled and high-risk specialties began to lose practitioners. This crisis spurred the state to pass legislative action, and Michigan’s now stable insurance market can be attributed in part to continuing tort reform, including caps on damages.
Medical Malpractice Insurance Requirements for Michigan in 2020
Medical professionals in Michigan are not required to obtain malpractice insurance. However, hospitals and other healthcare facilities may mandate that physicians carry medical malpractice insurance while working in their facility. Historically, Michigan physicians have carried limits of $200,000/$600,000, but many are now switching over to higher limits of $1 million/$3 million. High-risk specialties like surgery or Obstetrics/Gynecology may need policies with higher liability limits.
Good doctors need to protect against the possibility of a medical malpractice lawsuit, and working with an independent broker to secure comprehensive medical malpractice insurance is fundamental to reducing risk in your practice.
Medical Malpractice Insurance and COVID-19 in Michigan
On March 3, Governor Gretchen Whitmer created four COVID-19 Task Forces to address state operations, health and human services, education, and the economy. The state confirmed its first positive cases of COVID-19 in the state on March 10, 2020, declaring a state of emergency the same day. On March 18, the first three virus-related deaths were reported, and by the end of March, the state ranked third nationally for coronavirus-related deaths.
Despite stay-at-home orders and numerous other restrictions, the number of positive cases continued to grow throughout 2020. The state legislature approved $125 million to aid in state relief efforts with an additional $150 million allocated in March for medical supplies and personal protective equipment for hospitals. On November 25, 2020, the Michigan Department of Health and Human Services reported that six hospitals in the state were at 100% capacity with another 18 at 90% or more. In late December 2020, the state approved a $48.7 million package for health systems to administer COVID-19 vaccines.
With the symptoms of COVID-19 varying from patient to patient, the risk of misdiagnosis is high. It is recommended that any physician practicing medicine in Michigan during the COVID-19 public health emergency be protected by medical malpractice insurance.
Telemedicine in Michigan
The state of Michigan already had telehealth legislation on the docket as of January 2020, but the COVID-19 pandemic increased the urgency for reform. In May 2020, Governor Gretchen Whitmer signed the following state of emergency expansion rules for telemedicine in the state:
- All health care providers are authorized and encouraged to use telehealth services when medically appropriate and upon obtaining patient consent
- Healthy Michigan and private insurance carriers are authorized and encouraged to reimburse for telehealth services
- Insurance carriers must cover virtual check-ins and e-visits
- Written consent for treatment is not required, verbal consent for telehealth services must be documented
- Providers may use interactive, real-time, two-way audio in combination with asynchronous store-and-forward technology
- Remote patient monitoring, assessment, observation, education, and virtual visits may be conducted as part of telehealth services
- Physicians can prescribe medications, including controlled substances, without an initial in-person visit
Since physicians are held to the same standard of care regardless of whether they are practicing via telehealth or in-person visits, it is recommended that doctors carry insurance that specifically covers telemedicine.
Malpractice Insurance Rates for Michigan Doctors
Premiums in Michigan are high on average, but the specialty and location of the provider can greatly affect medical malpractice rates. For an individualized quote, make sure to contact an independent medical malpractice insurance broker.
State filed rates from 2016
Tort Reform in Michigan
In 1986, Michigan passed its first major tort reform. This legislation required that lawsuits be filed in the county in which the malpractice occurred, mandated a higher standard of expert testimony, capped non-economic damages at $225,000, and addressed issues around joint-and-several liability.
In 1993, continuing tort reform increased the cap on non-economic damages to $280,000, increased standards for expert testimony even further, required that all medical malpractice plaintiffs to file an affidavit of merit, and “permitted binding arbitration for medical malpractice cases that involved damages not in excess of $75,000”.
The state has adjusted its cap on noneconomic damages periodically due to inflation. As of January 2020, the “upper cap” was set at $842,500 and the “lower cap” at $471,800.
Michigan’s Damage Caps on Medical Malpractice Lawsuits
Like many states, Michigan has a cap on non-economic medical malpractice damages, which include factors such as anxiety, depression, pain and suffering, emotional distress, and loss of consortium. In 2020, the state announced that the “upper cap” was adjusted to a limitation of $842,500 and the “lower cap” was adjusted to a limitation of $471,800.
If the medical malpractice resulted in at least one of the following, the upper cap applies:
- The plaintiff is hemiplegic, paraplegic, or quadriplegic resulting in total permanent functional loss of one or more limbs caused by an injury to the brain and/or spinal cord;
- The plaintiff has permanently impaired cognitive capacity rendering him or her incapable of making independent, reasonable life decisions and permanently incapable of independently performing the activities of normal, daily living; or
- The plaintiff has suffered permanent loss of or damage to a reproductive organ resulting in the inability to procreate.
If none of the above criteria are met, then the lower cap applies to the medical malpractice claim.
There are no caps on economic damages in the state. Economic damages include things like past and future medical bills and expenses, funeral expenses, and lost wages.
Statute of Limitations for Medical Malpractice Claims
The major guidelines regarding the state’s medical malpractice statute of limitation are as follows:
- the standard deadline set by Michigan gives an individual two years from the date on which the alleged medical error was committed to file a lawsuit
- if the injury is not discovered within the two-year deadline, the claim must be filed within six months of the discovery (or when it should have been discovered)
- the state’s “statute of repose” requires that a claim be filed no more than six years after the date on which the underlying malpractice was committed, regardless of when the existence of the claim was discovered
- the “statute of repose” does not apply to cases of malpractice fraud or when “there has been permanent loss of or damage to a reproductive organ resulting in the inability to procreate”
- specific guidelines exist for minors who have suffered an injury based on the type of injury and the age of the child
- Michigan’s Wrongful Death Act doesn’t specify an amount of time in which a wrongful death claim must be made. “Rather, any action filed under the Wrongful Death Act ‘borrows’ the statute of limitations that applies to the underlying cause of action”
Tail Insurance in Michigan
Doctors practicing in Michigan that have a claims-made policy but DON’T have Prior Acts insurance (also known as Nose Coverage) need a tail insurance policy to ensure that they’re protected from malpractice claims when changing jobs. Your exposure period begins with your retroactive date (the first date of employment with your last employer) and ends on the policy cancellation date (your last day seeing patients at that job). If a claim is made after your policy expires, tail malpractice insurance will protect you. Often before you begin a new job, your new employer will want to confirm you have tail coverage from your prior job. To get the best rates on tail insurance in Michigan, contact a broker before you notify your employer of your resignation.
When and why is tail insurance necessary?
When a physician ends their employment, their insurance coverage with that employer also ends. Because most liability policies are underwritten on a claims-made basis, if a claim is filed against you after you leave your employer and your insurance coverage has already ended, you can be exposed to a lawsuit. Tail insurance covers you from your retroactive date up to the last day the policy is in effect – with the ability to report claims years after the last day. Read more about options for tail insurance.
Medical Malpractice Insurance Outcomes in Michigan for 2019
The total medical malpractice payout in Michigan for 2019 was $40,592,250.
Like many states, Michigan is facing a physician shortage. Federal data shows there are shortages in 75 of Michigan’s 83 counties. Fortunately, Michigan State University is seeing an increase in applications. In 2020 the medical school reported a 28% increase in applications as compared to 2019, with many people expressing the desire to “dedicate their career to serving marginalized communities and eradicate health care disparities in underserved populations”.
According to the Association of American Medical Colleges, half of the students who have residences in Michigan stay in the state. Perhaps this is because Michigan provides loan repayment incentives to doctors practicing in the state. Under one program, primary care providers working in non-profit clinics in underserved areas can get up to $200,000 in loan repayments. In another, the state partners with medical schools to “increase the number of residency slots for primary care and high-demand specialties in underserved places’ through loan repayment programs.
MEDPLI helps doctors from all specialties. Whether you are a cardiovascular surgeon in Detroit, an anesthesiologist in Grand Rapids, or a radiologist in Sterling Heights, we can help you find medical malpractice insurance. To get coverage from an A-rated carrier, contact us by requesting a quote.