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D&O Rates on the Rise Due to ACA

As health care companies work to meet the demands of the Affordable Care Act (ACA), their directors and officers are facing a variety of new risks. Subsequently, companies both large and small are seeing a spike in their directors and officers (D&O) insurance rates.

Ninety-one percent of health care organizations renewed their D&O policies with rate increases, according to Marsh, a risk management research firm. Midsized to large companies saw a 9.6 percent increase, while smaller organizations saw a 12.7 percent increase in the third quarter of 2013.

One major concern of D&O insurers is antitrust issues that may arise as health care companies consolidate to form accountable care organizations (ACOs) and other joint ventures and provider networks to improve the quality of patient care. In an effort to block some hospital mergers and promote competitiveness, regulatory agencies, such as the Federal Trade Commission, identified health care as one of their main areas of focus for pursuing antitrust cases.

Besides the risk of antitrust allegations, other health care D&O exposures include contractual liabilities and lawsuits from customers and competitors, in addition to risks associated with payer contracts and the pricing of services, contract mismanagement and more.

Contact Warren G. Bender Co. today to discuss D&O risks for your health care organization and how to protect yourself.

Filed under: Classic — Manager @ 11:55 pm January 14, 2014