Professional Liability

The Promise of Telemedicine

Ease of access and limitations on usage make this game-changing health care delivery method a popular choice for patients and a palatable risk for underwriters.
By: | May 2, 2017 • 6 min read

Talk to a hospital risk manager in the Midwest and they will say this: “We don’t have enough beds and providers to deliver adequate mental health services to wide swaths of the population.”

Now add in the access issues faced by rural residents to health care services in general. Or the fact that many providers do not take Medicaid patients. Or consider the risk of transporting a combative, fearful autistic child to the doctor’s office; or the fear of attack that a health care provider confronts when treating a potentially violent prison inmate.

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Telemedicine — the ability for a medical provider to consult with a patient in a video conference — seems to present the cure for these societal ailments.

Its use is taking off like a rocket. The global telemedicine market is expected to be a $35 billion industry by 2020. Just two years ago, according to industry studies, there were approximately 20 million telemedicine consultations. That number is expected to increase to about 160 million — an increase of 700 percent — by 2020.

“We’ve been pretty heavily involved in the telemedicine arena for five years now and have seen exponential growth.” — Danny Talley, director of voluntary benefits, HUB

“We’ve been pretty heavily involved in the telemedicine arena for five years now and have seen exponential growth,” said Danny Talley, a Denver-based director of voluntary benefits with HUB.

Talley said ease of access and the fact that many minor afflictions, from colds to skin rashes, can be addressed in a teleconference are some of the keys to that growth.

The approach also lends itself well to mental health treatment, where talking through an issue with a licensed therapist in a video conference closely approximates a face-to-face visit.

At the very least, said Talley, a video conference with a caregiver can help to assess someone’s mental health and determine whether a face-to-face meeting, or some other intervention, might be necessary.

“With psychiatric care, the bulk of it has to do with talking to the patient, asking them questions,” said Njoki Wamiti, a vice president with IronHealth, the health care division of specialty underwriter Ironshore.

“In my opinion, I don’t think it makes that much of a difference. Whether it’s via a video or one-on-one, you are still having the same conversation,” she said.

Larry Hansard, regional managing director, Arthur J. Gallagher & Co.

“A full 50 percent of our clinical encounters have been in the realm of mental health services. This in part relates to the challenges of a serious shortage of mental health providers in the rural areas of our state,” said Dr. Karen Rheuban, a co-founder of the University of Virginia Center for Telehealth. Last year, the center was renamed the Karen S. Rheuban Center for Telehealth in honor of Rheuban’s work to expand health care opportunities through telemedicine.

“In most circumstances, a high quality video conference comports with the standard of care in mental health,” she added.

But as we assess potential liability in this field, let us not confuse a telephone conversation with a video conference conversation. When it comes to establishing a verifiable doctor/patient relationship, they are two very different things.

Rheuban said the Commonwealth of Virginia and the Drug Enforcement Administration have weighed in on the prescribing of Schedule II through Schedule V psychotropic drugs in the absence of a prior in-person visit.

“We are concerned about the risk of establishing a doctor-patient relationship with a telephone encounter alone that results in the prescribing of controlled substances,” she said.

The UVA program offers telehealth services across the health care continuum, from prenatal to palliative care, to acute care, consultations, follow-up visits and remote patient monitoring. It offers live video-based visits and store forward technologies.

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As an example, ophtalmologists with the UVA program have trained community providers to obtain retinal images that are sent to them to screen patients with diabetes for retinopathy, the No. 1 cause of blindness in working adults.

Arthur J. Gallagher Regional Managing Director Larry Hansard, who suffers from frequent upper respiratory infections, recalled his own experience with telemedicine. “The physician looked at my throat via the real time video capability on my smartphone,” Hansard said. There was a prescription waiting for him at the drugstore in 10 minutes.

Compare that experience with having to wait days for an appointment, then taking off from work, driving a half hour or more, waiting to be called in to see the doctor and then driving back to the office.

“Why haven’t we been doing this forever?” Hansard asked.

Minimal Loss History

Telemedicine is growing quickly, so its loss history has yet to be well-established. As things stand, more than 70 percent of telemedicine interactions are for fairly common conditions.

“We are not seeing high-severity-type claims, most of the telemedicine usage we are currently seeing is for low-severity illnesses,” said Hansard.

The loss statistics that are available for telemedicine professional liability losses support Hansard’s statement.

“Licensure is the big risk for telemedicine providers, as they attempt to match a patient with a physician licensed in the state in which the patient is seeking care.” —  Larry Hansard, regional managing director, Arthur J. Gallagher & Co.

A 2015 report from the Physician Insurers Association of America revealed that of 94,228 medical professional liability claims in the PIAA’s Data Sharing Project (DSP) for the years 2004 through 2013, 196 claims were connected to telehealth.

The average indemnity loss for a telehealth claim was $303,691, compared to $328,815 for all MPL claims within the DSP.

“Licensure is the big risk for telemedicine providers, as they attempt to match a patient with a physician licensed in the state in which the patient is seeking care,” Hansard said. Many health care insurers will exclude coverage for a claim if it’s proven that the provider was not licensed in the same state where the patient received care.

Imagine a scenario where a patient is a passenger in a car that crosses the state line between Texas and New Mexico and is talking to a telehealth provider on the phone. If the provider is licensed in Texas, but not New Mexico, and there is an adverse event, the claim might not be covered.

“There are so many scenarios where people could cross state boundaries while on a telemedicine exchange,” Hansard said.

Hansard said most telemedicine providers are using smart technology so that they can track patients. But some aren’t.

“Some of the telemedicine providers are relying on older technology and they take the patient’s word for where they are located at the time of treatment,” Hansard said. “This could lead to problems if the patient misrepresents their location and the physician is not licensed in that particular venue.”

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Hansard looks at the international use of telemedicine optimistically.

Imagine you are a supervisor on an oil rig in Venezuela. If you had the opportunity, would you rather consult with your doctor back in Texas via a teleportal, or have a face-to-face consultation with someone you don’t know as well.

“I understand that there are certain countries that will grant a U.S. doctor automatic privileges in those countries,” Hansard said. “If that’s true just imagine the possibilities for some of these telemedicine companies to set up shop there.” &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

After 20 years in the business, Navy Pier’s Director of Risk Management values her relationships in the industry more than ever.
By: | June 1, 2017 • 4 min read

R&I: What was your first job?

Working at Dominick’s Finer Foods bagging groceries. Shortly after I was hired, I was promoted to [cashier] and then to a management position. It taught me great responsibility and it helped me develop the leadership skills I still carry today.

R&I: How did you come to work in risk management?

While working for Hyatt Regency McCormick Place Hotel, one of my responsibilities was to oversee the administration of claims. This led to a business relationship with the director of risk management of the organization who actually owned the property. Ultimately, a position became available in her department and the rest is history.

R&I: What is the risk management community doing right?

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The risk management community is doing a phenomenal job in professional development and creating great opportunities for risk managers to network. The development of relationships in this industry is vitally important and by providing opportunities for risk managers to come together and speak about their experiences and challenges is what enables many of us to be able to do our jobs even more effectively.

R&I: What could the risk management community be doing a better job of?

Attracting, educating and retaining young talent. There is this preconceived notion that the insurance industry and risk management are boring and there could be nothing further from the truth.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

In my 20 years in the industry, the biggest change in risk management and the insurance industry are the various types of risk we look to insure against. Many risks that exist today were not even on our radar 20 years ago.

Gina Kirchner, director of risk management, Navy Pier Inc.

R&I: What insurance carrier do you have the highest opinion of?

FM Global. They have been our property carrier for a great number of years and in my opinion are the best in the business.

R&I: Are you optimistic about the US economy or pessimistic and why?

I am optimistic that policies will be put in place with the new administration that will be good for the economy and business.

R&I: What emerging commercial risk most concerns you?

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The commercial risks that are of most concern to me are cyber risks, business interruption, and any form of a health epidemic on a global scale. We are dealing with new exposures and new risks that we are truly not ready for.

R&I: Who is your mentor and why?

My mother has played a significant role in shaping my ideals and values. She truly instilled a very strong work ethic in me. However, there are many men and women in business who have mentored me and have had a significant impact on me and my career as well.

R&I: What have you accomplished that you are proudest of?

I am most proud of making the decision a couple of years ago to return to school and obtain my [MBA]. It took a lot of prayer, dedication and determination to accomplish this while still working a full time job, being involved in my church, studying abroad and maintaining a household.

R&I: What is your favorite book or movie?

“Heaven Is For Real” by Todd Burpo and Lynn Vincent. I loved the book and the movie.

R&I: What’s the best restaurant you’ve ever eaten at?

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A French restaurant in Paris, France named Les Noces de Jeannette Restaurant à Paris. It was the most amazing food and brings back such great memories.

R&I: What is the most unusual/interesting place you have ever visited?

Israel. My husband and I just returned a few days ago and spent time in Jerusalem, Nazareth, Jericho and Jordan. It was an absolutely amazing experience. We did everything from riding camels to taking boat rides on the Sea of Galilee to attending concerts sitting on the Temple steps. The trip was absolutely life changing.

R&I: What is the riskiest activity you ever engaged in?

Many, many years ago … I went parasailing in the Caribbean. I had a great experience and didn’t think about the risk at the time because I was young, single and free. Looking back, I don’t know that I would make the same decision today.

R&I: What about this work do you find the most fulfilling or rewarding?

I would have to say the relationships and partnerships I have developed with insurance carriers, brokers and other professionals in the industry. To have wonderful working relationships with such a vast array of talented individuals who are so knowledgeable and to have some of those relationships develop into true friendships is very rewarding.

R&I: What do your friends and family think you do?

My friends and family have a general idea that my position involves claims and insurance. However, I don’t think they fully understand the magnitude of my responsibilities and the direct impact it has on my organization, which experiences more than 9 million visitors a year.




Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at [email protected]