How Skilled Nursing Can Fight Liability Insurance Pressures

In a difficult liability environment like the state of Kentucky, skilled nursing and long-term care (LTC) providers need to tap into their passion, their energy, and their own story to position themselves for success when renewing or obtaining a professional liability policy.

They also need to bring their data.

“[Providers] should absolutely use what benchmarks they can find,” Christian Coleianne, associate director and actuary at Aon Risk Solutions, told Skilled Nursing News. “And it’s not as difficult to benchmark internally as maybe some folks are thinking.”

Telling a positive story

Kentucky in particular has had issues with attracting insurers that are willing to write policies for long-term care providers, Michael Pokora, managing director at consulting firm Willis Towers Watson, told Skilled Nursing News.

They are increasingly unwilling to do business in the state — or are pulling back from the state entirely. And if a carrier does underwrite policies in Kentucky, the operator is likely to take a much higher per-claim deductible than they were a year ago, he explained.

In such a climate, an in-person meeting between the provider’s C-suite and the insurer can do wonders when it comes to liability insurance renewals, according to Pokora.

“You’re really allowing the passion, the vision of the organization to come through,” he said.

In a difficult external environment, though, there are additional steps an LTC provider can take. One is risk management. At Willis, this takes the form of a general and professional liability clinical risk diagnostic, JoAnn Carlin, who leads Willis’ clinical risk management team, explained.

“It starts with: What is the culture of that community, that facility, and we look for a culture of safety,” Carlin, who is a registered nurse (RN) and licensed nursing home administrator, told SNN.

The goal is to help the facility understand any gaps or weaknesses and establish best practices, as well as draw on the experience of other providers, to prevent the claim or the lawsuit, she added.

The underwriting submission, which consultants such as Willis can prepare, is also an important tool in telling the company’s story, providing a range of information from analytics to benchmarking, Pokora said. Ideally, it would tell the provider’s story — and that story would be a positive one.

Numbers needed

In states that are more prone to litigation — such as Kentucky — insurers offering professional liability insurance for LTC providers and SNFs will inevitably be taking that environment into consideration. They’ll also be looking at the skilled nursing and LTC industry claims data, their book of business’ performance in that state, and perhaps their own loss experience, Pokora explained. Some insurers will even get granular enough to assess external factors by county, or even zip code.

Individual nursing homes, meanwhile, will have to drill down into their own claims data. Insurers will be examining claim frequency, severity and the dollars spent on the claims that are settled, Pokora said. Other factors, such as quality ratings, will come into play.

“They wil look at incidence — how is that operator looking at and tracking incidents, and what is the conversion rate of those incidents to actual claims,” he said. “They’re going to look at staffing or employee turnover.”

Coleianne also emphasized the importance of claims data for nursing facilities as they try to get the best rates.

“Quite easily they can look at the number of claims that they have per facility, track those and look in their portfolio for areas where their loss control dollars should be spent,” he said. “If they’re troubleshooting areas and aggressively working to reduce their claim incidence, I think that would help them when it comes to the insurance marketing phase.”

Written by Maggie Flynn

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Maggie Flynn
Business reporter at Aging Media Network
When she's not working, Maggie enjoys running, reading, writing and sports, in no particular order. Favorite things include murder mysteries, Lake Michigan and the Pittsburgh Penguins.

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