Philadelphia Medicine Fall 2021 - 15

philamedsoc .org
Trainees' careers were jeopardized by Hahnemann's owners either because of a
negligent due diligence process, at best, or a cost-saving ploy at worst.
is destined to repeat itself.
Thank you to the Philadelphia County Medical Society and
American Medical Association.
The Hahnemann trainees were going to be left without complete
professional liability insurance coverage despite regulatory
requirements of the Accreditation Council on Graduate Medical
Education (ACGME) and the debtor's contractual obligation to
those doctors. In Pennsylvania and many other states, physicians
must have professional liability insurance to maintain a license to
practice medicine, including uninterrupted insurance coverage for all
periods of medical practice. (See table for explanation of professional
liability insurance terms.)
Type of Professional
Liability Insurance
Occurrence
Claims-made
Tail coverage
Nose coverage
entity at any time (including those who previously graduated from
Hahnemann and St. Christopher's Hospital for Children, along with
those who were displaced by the bankruptcy), were left to seek out
and finance their own tail insurance coverage. Some were quoted
more than $50,000 for an individual tail policy. Others, including
some first- and second-year residents, were considered " uninsurable "
so were not even eligible to purchase the coverage.
If not for the efforts of individuals such as Mark Austerberry,
David Aizenberg, William Pinsky, and other individuals, including
attorneys who anonymously advocated behind the scenes, the fate of
the physicians employed by the entity formerly known as Hahnemann
could have been very different.
Explanation of Coverage
Covers the insured at any time a claim is made regardless of whether the individual is still insured
by the carrier.
Covers the provider only while s/he is an insured of that company. If the provider ceases to be
an insured, any claim made after that is not covered. This is true no matter how long the provider
was insured by that carrier.
A policy purchased from the same carrier that effectively converts a claims-made policy to an occurrence.
The time window for tail-coverage purchase is very limited.
A policy purchased from a new carrier that provides coverage back to the initial effective date of any prior
claims-made policy(ies). Nose coverage can sometimes be included as part of a new made policy. Nose
coverage may not be available in certain circumstances.
The residents and fellows had signed contracts with Hahnemann
per ACGME institutional requirements so they would be covered for
professional liability regardless of when a claim would occur. That is,
the trainees were contractually promised occurrence coverage, but a
different, cheaper type of insurance (that is, claims-made coverage)
was purchased by Hahnemann instead, necessitating the purchase
of tail coverage. The residency spots were auctioned to the highest
bidder and the debtors claimed that funds from the sale of the residency
positions were expected to cover the expensive tail insurance
cost. Without purchase of the tail coverage to provide continuous
retroactive professional liability insurance coverage, the doctors faced
potential sanctions from licensing boards, including loss of licensure
and potential inability to participate with third party payers such as
the Medicare Program. As a result of this breach of Hahnemann's
contractual obligation, any physician trainee employed by the
The physicians in training were organized into an Ad Hoc
Resident Committee and represented by an attorney funded by
the AMA. Fortunately, the surge of assistance from the PCMS and
AMA helped elevate the trainees' plight. The following is an excerpt
from the public court record:
The Ad Hoc Resident Committee brings this Motion because the
Debtors have willfully created a crisis that threatens the livelihood of
nearly 1,000 Residents and poses a severe threat to the Pennsylvania
medical system. The Residents need relief from this Court immediately.
The professional liability insurance that covers their time
at Hahnemann expires on January 10, 2020. Unless the Debtors
honor their contractual obligations to purchase tail insurance for the
Residents, the Residents will have no professional liability insurance
covering their work at Hahnemann from January 10, 2018 through
continued on next page
Fall 2021 : Philadelphia Medicine 15

http://philamedsoc.org

Philadelphia Medicine Fall 2021

Table of Contents for the Digital Edition of Philadelphia Medicine Fall 2021