Identifying and Pricing Managed Care Errors and Omissions Exposures

In response to increasing healthcare costs and threats from the public sector to play a larger role in the delivery of healthcare products. the private sector has worked frantically to provide more efficient healthcare services. As a result, managed care continues IO grow in appeal and scope. The organizations participating in the managed care process come in many forms, entering and exiting at various points in the delivery process. The emergence of these diverse managed care organizations (MCOs) has led to an increase in the requests for insurance covering their Errors and Omissions (E&O) exposures. The demand for a product that is current and complete has fallen specifically on hV0 types of insurance underwriters: medical malpractice specialists and D&O/E&O specialists. The lack of a definitive source for insurance protection is a reflection of the blended exposures of managed care organizations. This void in comprehensive expertise has led IO myriad products and perhaps an even greater number of pricing approaches. The primary cause of the varied industry approaches to pricing managed care E&O is that there are two distinct underlying types of covered actions: claims alleging bodily Injury and claims alleging economic loss. Our analysis shows that it is difficult IO price E&O coverage for managed care organizations accurately and consistently without a rating program that accounts for both of these causes of action. This paper is divided into seven sections. The first section selves as an introduction to the history of managed care. The second section describes the different types of managed care organizations and where they tend to fit into the delivery process. The next section discusses the need IO distinguish between economic loss and bodily injury damages and how they tend IO interface with D&O, E&O and medical malpractice policies. Section four outlines exposures of managed care organizations, focusing on those that would typically be covered specifically by an E&O policy. A review of existing pricing frameworks in the marketplace is provided by section fwc. The sixth section provides suggested criteria for pricing including exposure units and underwriting criteria. The final section outlines our conclusion.