There are many requirements to becoming an FQHC beyond providing comprehensive health services to the underserved persons of a community. One of the most important is to qualify for the Public Health Service Act (PHS) funding and enhanced reimbursement from the Medicare and Medicaid programs.
Being federally funded means being subject to federal requirements. When choosing insurance solutions, considering several potential legislative barriers that could cause complications in caregiving is smart. However, being subject to additional legislation may lead to increased liability exposure in malpractice, errors and omissions, crimes, and more.
Federal Tort Claims Act
Medical malpractice claims are one of the most common claims for health facilities. They come from acts, errors, and omissions of medical professionals, excluding intentional acts or sexual abuse and misconduct allegations. An FQHC is treated as a Public Health Service employee for medical malpractice liability coverage purposes and can be covered under the Federal Tort Claims Act (FTCA). This coverage provides medical malpractice coverage to reduce insurance premiums so that you can use more of your funding for health services. Because the FTCA program is a standard offering, there can be gaps in its coverage depending on what health care services you may offer your patients.
Medical malpractice claims can become very expensive to defend, and if the FQHC is found liable, the settlement on top of the defense costs can be enough to force doors closed. Purchasing a gap or wrap policy can be inexpensive in premium but offers additional peace of mind if a claim arises that the standard FTCA policy may not provide adequate coverage for.
Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) establishes the standards employers must follow regarding their employees’ wages, hours worked, record keeping, and age limitations and requirements. This applies to private employers and federal, state, and local governments. So, while this act may not be aimed just at FQHCs, it can open up some additional concerns. When working on limited budgets, restricted staff and payroll funds can conflict with an organization that works around the clock to provide services.
Good health care professionals require higher salaries which can mean less than adequate staffing as FQHCs may not be able to pay as well as private facilities. Less staff in an industry that requires a higher time commitment can mean an even higher payroll budget to obey FLSA laws because nonexempt employees must also be paid overtime wages if they work more than 40 hours a week. While this might not apply to exempt health care professionals on staff, it usually will apply to support staff which are a vital part of FQHCs.
Health Insurance Portability and Accountability Act
The Health Insurance Portability and Accountability Act (HIPAA) has been around since 1996 to protect patient information. If you have ever been to a medical facility of any kind, you have signed a form acknowledging this and probably some other forms about what medical information they can release, to whom, and through which communication channels. Any violations of HIPAA can result in monetary or criminal penalties. While health care facilities try to be diligent about the sensitive information they hold, many risks come from having abundant sensitive information in one spot.
Cybercrime has been rising in the last couple of years, endangering all industries. However, industries subject to HIPAA, like health care facilities, are a hot commodity; sensitive personal information is a gold mine for cybercriminals. This risk can be increasingly harmful to FQHCs, who should have a comprehensive cybersecurity strategy complemented by a robust cyber insurance policy, but organizations may find allocating funds for these programs cumbersome, regardless of how necessary they are to avoid claims, ransom payments, and federal penalties.
How we can help
Every organization should have a comprehensive team. As a dedicated partner, Marsh McLennan Agency’s FQHC insurance solutions can provide protection reflective of current and forthcoming legislation, industry changes, and your organization’s needs. We provide a holistic approach that fits your goals and budget, so that your organization can continue providing quality care for our communities. Reach out to one of our FQHC experts today to see how our proprietary program can be the solution you need.
