Connecticut emergency physician Eric Salk, MD, MPH, received a distressing notification in March 2021. The Emergency Physicians Insurance Exchange Risk Retention Group (EPIX RRG) had been placed in rehab in Vermont where he was domiciled. (https://epixrrg.com.)
The 60-year-old emergency physician, who served as medical director and president of his emergency department and held leadership positions in the community during 30 years of practice, faces his first malpractice case, and his insurer does not will not cover all costs. “Needless to say, it was a shock,” said Dr. Salk.
He is one of 57 insured doctors with an open claim, according to state records. “These are cases that will likely cost hundreds of thousands to millions of dollars to defend and / or settle,” said Dr Salk. “As the rehabilitation process requires policyholders to be reimbursed 40% of costs incurred up to 40% of policy limits, we envision potentially overwhelming exposure to personal financial risk.”
EPIX was organized on July 21, 2003, as a Nevada-domiciled risk retention group, specifically to purchase malpractice insurance for emergency physician groups at a time when malpractice insurance was no longer available. was not available at a reasonable price, according to the rehabilitation petition. A risk retention group is owned by its members and must be based or domiciled in one state, although it can insure physicians in many states. They are responsible for issuing policies and assuming the risks inherent in these policies. Members of risk retention groups fund the business.
EPIX has operated from California for a long time, but operations have been reduced over the years as malpractice insurance has become easier to obtain and coverage has become available from other carriers at more competitive prices. EPIX was transferred to Madison, WI, where it was operated by independent contractors, according to an affidavit from J. David Leslie, an attorney who is Vermont’s assistant pardoner in the case. The company changed its official domicile to Vermont in 2015, where its financial condition was monitored by the Insurance Commissioner.
The commissioner ultimately concluded that EPIX was insolvent and that continued operations would be dangerous for policyholders, claimants and the insurer’s creditors, and he asked the board of directors of the company to consent to an order of rehabilitation. EPIX is not eligible for guarantee fund protection because it is a risk retention group and its creditors can only receive payment on existing assets, which are lower than the company’s liabilities.
Mr. David’s affidavit states that the company can make an immediate reimbursement of 40% of the defense costs “while deferring payment of the remainder.” In this case, the doctor would pay the defense costs and any compensation payments to the people suing, and the company would immediately reimburse 40 percent. Mr David said he could not comment but provided all legal documents.
Caught off guard
Edward Boudreau, DO, was on the list of chairman of the board of directors of EPIX in the rehabilitation order of February 15, 2021, but said he had nothing to do with EPIX for two years, although ‘he has been a member for several years. . He said it was not true that doctors ended up without coverage, but that “the method by which they can access that coverage has changed.”
However, Dr Salk said that EPIX told him, when he entered rehab, that he was on his own to defend and settle the claims. “We will pay 40 percent of what you spend,” he said. “If I was just with the limits of the policy, I would need $ 600,000. At some point, I have to file for bankruptcy.
It’s even worse for young doctors who start their careers with debt and families in medical school, said Dr Salk. “We were caught off guard. My hospital is one of those named in the lawsuit, but it’s settled.
His small emergency medicine group disbanded in 2019 and was taken over by the hospital. They did not have EPIX coverage at the time, so Dr Salk said he had to rely on the coverage he had in 2015 because the lawsuit stemmed from a case that year.
Dr Salk said the situation was opaque to him and his lawyers. “Nowhere in this process has the insured been given the opportunity to review or comment,” he said. “Meanwhile, a special assistant rehabilitator [who happens to be the same lawyer who drafted the rehabilitation plan for the court] is paid to oversee the process, and we found him to be extremely reluctant to engage in a constructive dialogue towards resolving our outstanding claim, only increasing costs and anxiety for those of us left behind. by this insurer.
Dr Salk said in an email to REM that he’s exhausted and increasingly demoralized. “Sadly, as I sought to end a career I loved, I found myself faced with a dwindling of a few options, all terrifying, and most involving surrender to legal extortion, postponed retirement and / or personal bankruptcy. We have ensured followed the rules and paid our premiums throughout specifically to protect ourselves against such a crisis. This is not fair. “
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Mrs SoRellehas been a medical and scientific writer for over 40 years, previously at the University of Texas MD Anderson Cancer Center, The Chronicle of Houston, and Baylor College of Medicine. She has received over 60 awards, including the Texas Human Rights Foundation Award. She helped REM For more than 20 years.