Listen to the podcast here: My DPC Malpractice Insurance
Episode summary: In this podcast episode of DPC Pediatricians, Marina welcomes Citlally Mancilla, founder of My DPC Insurance, to discuss malpractice insurance specifically for physicians practicing Direct Primary Care. Citlally shares how her experience in medical malpractice insurance led her to recognize that DPC physicians often have a lower risk profile than traditional primary care physicians due to smaller patient panels, longer visits, fewer hospital responsibilities, and differences in billing and practice structure. The conversation explores what physicians should understand when shopping for their own malpractice coverage, how DPC-specific factors can affect premiums, and why having an insurance professional who understands the DPC model can be valuable. They also discuss coverage considerations for new and established practices, the importance of accurately representing a practice’s current size and services when applying for coverage, and how some DPC physicians may be able to significantly reduce their malpractice insurance costs while maintaining appropriate coverage.
Welcome to DPC Pediatrician. We’re Dr. Phil Boucher and Dr. Marina Capella, two DPC Pediatricians who are on a mission to share our love of direct primary care with you.
Welcome everyone to another episode of the DPC Pediatricians podcast. Today I’m delighted to introduce my guest, Citlally Mancilla, who works, well actually she started the company My DPC Insurance and I met her At the recent DPC Pediatric Conference, which was hosted by the DPC Alliance, we had kind of like tables near each other,and I got to know about her and her services. But she’s here today to talk about why she started this company and how she is able to help DPC physicians uniquely in ways that other malpractice insurance companies may not be able to.
So welcome and thank you for being with us, Citlally.
Thank you, Marina. Thank you for having me, DPC Pediatrician. I had, as Marina mentioned, was delighted to meet her at the most recent event and meet several physicians that may be listening on to this podcast at that event. And so it was a delight to attend, support the DPC model across the various different organizations and spend time speaking with what DPC Pediatricians does for The overall DPC model and physicians were interested in entering that specifically.
Excellent. So I’m curious, give us a little bit of background. Like how did you get involved in this DPC space? I believe you were doing insurance, malpractice insurance work even before you started my DPC insurance. So what got you interested in that? And then also in this little niche world that we have of direct primary care?
Right. So I’ve been in malpractice insurance for 26 years, since 2000. And I started off as a broker with one of the largest national brokerage firms in the country, actually the second largest at the time, and within the medical malpractice division.
From there, I moved on to several other positions as an underwriter and in an agency as well. And most recently, I worked for a company who Was focused on malpractice specifically for physicians. At that company, I was approached by two DPCA patients. Physician members who were seeking assistance on their malpractice,
they understood that their exposure was significantly lower than the standard PCP. And so they had been referred to me and asked me to assist them with their own policies. And that experience for them was very pleasant as well for myself. In that exchange,
I was able to serve them by reducing the premium that they were presently paying for the same, if not better coverage. And in that relationship, they shared with me everything about DPC, the model, how long they’ve been doing it for, what their vision is for physicians looking to the DPC model in moving into independence from corporate medicine.
So they actually tasked me to create a program, which I began with my former company and then DPCs being who they are, they encouraged me to become independent, which I did. And my sole focus at my DPC insurance, our sole focus is to serve DPC physicians exclusively. And so what we did once we separated,
we began a relationship with a larger company who was older, larger, had the financial stability to serve physicians if claims arise. And they have a robust risk management team focused exclusively on DPC. So we started that program back in 2020. And then it has evolved to how it is now.
We’ve already served over a thousand physicians securing coverage for them. And it’s pretty much the only true DPC program that exists. We look at physicians at their lower patient panel size. We look at other factors that significantly reduce their exposure. A lot of DPC physicians relinquish their hospital privileges.
And the majority of claims come from hospital, from patients time at hospitals as well. They’re Doing the billing, obviously, internally. And so the DPC physicians won’t get pulled into billing audits. And so that reduces exposure significantly also. And the fact that they spend a lot more time with their patients than they did in the standard PCP model really solidifies the relationship.
So we consider and look at other factors that reduce the DPC practice model, having smaller patient panel. Size is spending more time per visit with their patients. So our focus is to look at the reduced exposure of a DPC practice and price it accordingly.
They’re spending significantly more time with their patients. They have smaller patient panels. A good majority of DPC physicians relinquish their hospital privileges and they just refer out. And so that reduces their Exposure there as well. The internal billing eliminates being pulled into billing audits. So there are multiple factors that reduce the DPC practices exposure.
And so our partner carrier and our team have evaluated all those reduced exposures and significantly reduced the price of malpractice insurance on an annual basis for physicians.
That’s wonderful. Yeah. I think that I remember when I was starting five years ago, I’d never had to apply for my own malpractice insurance. It was always through my employer and it was kind of a new world to help to try to navigate. And I was a little lost.
So I did a lot of reading, a lot of Googling, okay, what are the different kinds of policies? How much coverage do I need? All of those details. And one of the questions that I had as I was searching is, Will my malpractice insurance cover the home visits? Even though I don’t do that many home visits,
I know that a lot of us DPC physicians love the ability to do home visits. Some people even save on overhead by starting out just home visit based until they’re able to grow their panel enough to afford the overhead of a location. So can you speak to that?
Do your policy specifically take this into consideration and cover us when we’re doing home visits?
Absolutely. Thank you so much for bringing that up. Our policy actually has automatic coverage for home visits, automatic coverage for telehealth. As a malpractice carrier, what most carriers require is a copy of the license for each state that a physician will be extending care to. But other than that, we automatically extend telehealth and home visits.
And as you mentioned, quite a few DPC physicians as they’re trying to Build their patient base and grow their revenue before they actually commit to a location. They do start telehealth and home visits until they have adequate enough time to decide where exactly they’re going to plant their roots in an actual location.
Yeah. Interesting. What about for like you mentioned, like they just have to show a license for each state that they’re in. Usually, if a physician is practicing in more than one state, is the malpractice insurance coverage more expensive?
It sometimes is, and the only reason is because each state is different. Each state has their own specific standard state limit. So, for instance, in Texas, where I’m located, the standard state limit is $200,000 per claim with a $600,000 aggregate. Compared to Oklahoma, which has a standard state limit of $1 million per claim,
$3 million in the aggregate. So that makes a difference in pricing as well. And so depending on what percentage of a physician’s practice is going to focus in what state, the pricing may vary, right? So that is something to consider. And so when a carrier requires the license, obviously they want to make sure that the physician is licensed in the state that they’re extending care to, but also they need to understand the percentage split between the percentage split focus between each state to determine the appropriate price for the coverage.
As well, some states, some venues in some states or some counties are more litigious than others. And so the pricing for that would be a little bit higher. So those are factors that carriers look at when they are licensed. And so we do have quite a bit of physicians that have multiple state licenses and extend care to multiple states.
We just have to get a good understanding of their percentage split within each state and obviously verify that they are licensed in each state and that they are following the rules or regulations of each state because each state does as well have different telehealth rules and protocols so that we want to make sure that they’re abiding by that as well. Gotcha.
You mentioned two numbers that I think it’s important for physicians to understand as they’re shopping around for malpractice insurance, and that is the per claim amount and the aggregate amount, which usually we see kind of written on the cover page of a policy as a like, Number slash number.
And some of us know what that means and some of us get confused. So can you explain just a little bit more of what is that per claim amount and aggregate? Because when I hear it, I assume it’s like, okay, if somebody files a claim against me, the maximum payout for one claim will be 1 million.
But then kind of over the life of that policy and coverage, the most that they will pay out for me is 3 million. Is that correct?
Well, the first part is. The second part, it’s not necessarily over the life of the policy. They’ll pay out $3 million. Policies are annual, and so that’s an annual limit that is extended to the physician, right? So it’s $1 million per claim, as you indicated, and $3 million in the aggregate for the year.
So if there are three claims in that year, the maximum they’ll pay for each claim is $1 million. The maximum they’ll pay that year is $3 million. So it’s primarily for the annual limit. I see. Okay.
That makes sense. Now let’s talk a little bit more about another technicality in malpractice insurance policies. And that is the difference between a claims made policy. And a, shoot, I’m blanking on the name. Occurrence. Occurrence-based policy, yes. So claims made is definitely more common. When I was shopping around, most of the policies I found were claims made, and I really wanted an occurrence-based in order to avoid tail coverage in the end. So can you review the basics that you should understand? Absolutely.
Yes, ma’am. That comes up a lot, especially because physicians are coming out of corporate medicine and a lot of facility policies are occurrence, but that’s primarily because there’s a revolving door of physicians, right? And so the corporation, the hospital, Hospital maintains occurrence policies for many reasons, but a primary reason,
it’s easier to make sure that the exposure is covered once the physician departs the entity, right? So occurrence policies charge pretty much upfront for that tail at the end, right? So they’re charging year one, year two, year three, however many years the physician is part of that practice. That policy charges from the onset, that higher premium rate.
That calculates within it the cost of the tail.
As an example, kind of like when I was shopping around, they were quoting me about $2,500. Starting out per year for claims made, but it was like $6,000 from the outset per year for occurrence. And that’s the blessing in that. I never wanted to have to pay tail coverage, which I’ve heard can be like $20,000, $30,000, $40,000.
But maybe we’ll touch on that in a little bit. But yeah, so for us in DPC, maybe nowadays we’re getting quotes out there of $3,000. A year for claims made. And when we’re really pinching pennies in the beginning, it can be really tempting to do that claims made.
And there may be very good reasons to go ahead and do that claims made. So go ahead. And then what would you have to say about that claims made policy, which is more common?
Absolutely. So like you mentioned, the claims made policy is rated lower than an occurrence policy because it’s not charging upfront for a built-in tail, right? And so the best example that I provide is for, so a claims made policy charges you a percentage of the first year of what the mature rate is, right?
So let’s say that with COPIC, which is the carrier that we utilize for the program, they step organically and Over a four year period. So what that means is that, and this is all claims made in this example. So what that means is the first year they charge a percentage of what the mature rate is, right?
So let’s say the first year they charge 25% of what the mature rate is on a hundred dollar And this is just an example for the sake of this conversation and understanding, right? And so the first year you’re paying $25 out of the $100 mature rate. The second year, right?
And so the first year is only covering you for the exposure of that first year. The second year, that percentage steps up to a greater, higher percentage of that mature rate. Because it’s charging now for the exposure of the first year and the exposure of that second year. So let’s say that higher percentage rate is 50%.
So the second year you’re paying $50 of that $100 mature rate. The third year, let’s say it bumps up to 75%, you’re paying $75. And then the fourth year, once it’s mature, you’re paying the full $100. And then a policy, typically once it reached maturity, the premium shouldn’t change other than for a handful of reasons.
And that would be like, let’s say you have your practice profile completely changes, right? You started practicing in a lower rated state, and then you’re now offering telehealth in a higher rated state. And so that would change the cost of your premium once the premium has matured. Another factor would be, for instance,
if the carrier decides to increase their rates, they’ve experienced some claims activity within a specialty, within a program, within a model. And so if they’ve increased their rates, their actuaries have advised them to increase their rates. So that would then change the rate after it’s matured.
But just like a practice profile would change the rate, it could also change it downwards. Let’s say You’re at a higher rated venue and then you decide to go to a lower rated venue that you would see that in a premium reduction as well.
So claims made policies were pretty much created at one point because the only thing that was available were occurrence policies and solo physicians, a lot of them, this was Years or decades ago at this point were practicing without malpractice insurance because they couldn’t afford it because the only option were occurrence policies.
And so they created claims made policies so that a physician Had the protection that they needed. A lot of states at the time or facilities required them to carry the malpractice, but it was more affordable because it would grow technically as their practice grew, as their revenue grew. And so most carriers that offer claims made policies step.
All carriers have different percentages as how they step from year one to year two. And then the TAIL coverage is available By law, on a claims made policy, it has to be made available to a physician, to a practice, to an entity when the coverage is canceled. So regardless, there is an option to purchase a tail policy.
Earlier, you mentioned some tail policies could be really expensive, and that’s because all carriers, again, are different. And so some carriers will charge you for tail coverage Let’s say two times the undiscounted premium. So let’s say the base rate of your malpractice policy is $10,000. I’m just going to use larger numbers, but round numbers.
Let’s say the base rate of your policy is $10,000, but with discounts that a physician qualifies for, that premium drops to $5,000. So then let’s say that you decide to cancel your policy. The carrier has to offer you a tail regardless by law. They have to offer you a tail.
And their rating mechanism for that tail is charging two times the undiscounted premium, right? And so that would be two times the $10,000. So that would make your tail premium $20,000. Other carriers, Copic, for instance, doesn’t charge the undiscounted premium. They charge 160% of the discounted premium. So wherever your premium is,
when you decide to cancel your policy and you are requesting tail, it’ll be 160% of the discounted premium. Tails can be affordable. And then there are other carriers who offer standalone tails, right? So if the carrier that you’re presently with has a tail offer that is incredibly too high, you can also shop around for a tail offer.
Policy that would cover your prior exposure from the carrier that you’re tailing out of at a more reasonable premium. So the difference pretty much between the occurrence, just to go back to the initial question, the difference between an occurrence and a claims made is
the tail being charged up front on an occurrence where a claims made is charged at the end. Another point that I do want to make with regards to that, a lot of physicians, a lot of insureds think that when they switch from one carrier to another, they have to purchase sale.
But if the new carrier is matching what is called the retro date, the prior act’s date from your policy, if they’re going to match that onto the new policy, There is no need to purchase a tail because the new carrier is assuming the exposure that you had with your previous carrier.
So if a claim arises from a policy that you had with your previous carrier, but it arises when you’re with your new carrier, the new carrier will assume that prior exposure. So there would be no need to purchase a tail when you’re switching from an old carrier onto a new carrier when the retroactive date is matched.
Gotcha. Okay. And then the occurrence, just for further clarity, claims made covers claims that are made while the policy is being paid for, is active. But then if you retire or if you change jobs or et cetera, you either have to have Another policy with the retro date or you have to pay tail. Is that correct? Correct.
Yes. Yes.
And then I’m glad that you mentioned the retirement when you retire with Copic in the program, you earn a free retirement tail once you’ve been uninsured for one year. So after your very first renewal, you would have earned that free retirement tail.
Oh, that’s really nice. Excellent. Well, maybe I should switch over, man.
Most careers offer a free retirement tail, but it’s typically after several years of being insured with them. The typical number is five years, but Copic, they extend a free retirement tail after one year of being insured.
Got it. Okay. And then with the occurrence policy, probably the reason I went with occurrence actually is I was just scared because I heard stories from other physicians in many different specialties that were like, oh my gosh, I had to pay $40,000 in tail coverage. And I just, my jaw dropped at that amount of money.
I never want to be in that position where I have to fork out $40,000 because God forbid something happens and I have to close my practice or like this doesn’t work because when we’re starting out, it’s a little bit terrifying. We don’t know if It’s going to work in our community.
We don’t know if we’re going to be able to be successful. So I just remember thinking there’s no way I ever want to be in that position. I would rather pay the $6,000 premium up front instead of saving for a couple of years, instead of Having the discount in the beginning,
but then it eventually gets to the maturity rate anyway, and I would have been paying that five, six thousand.
Oftentimes when you calculate, when you compare an occurrence policy versus a claims made policy and a tail, you’re paying thousands less with a claims made policy and a tail. The stories of the $40,000 premiums are typically depending on the venue that they’re in. A physician, for instance, in County,
which is one of the most litigious venues in the country, is going to be paying a much higher premium and therefore a much higher tail than a physician. For instance, again, just to utilize Texas as an example because they have a lower limit and therefore a lower premium than somebody tailing out in Texas.
Venues have a lot to do with it as well. That’s primarily the biggest factor. Come the factors of the carriers who have different percentages and different rules within their tails and how they charge for them.
Yeah. You mentioned obviously having worked with a lot of DPC physicians and understanding how because of that more relational care and the longer visits and all these things, we’re less likely to be sued. And also because we don’t work in hospital, we typically give up our hospital privileges.
Do you have enough data at this point to show that DPC physicians are Getting sued less often. I’m curious.
Well, I can say with certainty that we haven’t had a single claim with a DPC physician since the program began in 2020.
Wow.
That’s great. That I’ve been involved in. The program that I’ve been involved in, we haven’t had. We’ve had physicians report incidents that may give rise to a claim, which we always encourage, right? If you have a situation with a patient that you think may give rise to a claim, please report it.
You might have your claims team on the ready and also walk you through Any requests that you may receive from the patient, any requests that you may receive from attorneys, you want to be prepared in a timely manner with responses. So we always encourage for physicians to report incidents,
but we haven’t had a single claim since the program began in 2022.
Gotcha. Yeah. And one last question. Well, actually, second to last question on my end is, do you offer coverage to physicians in all states or are you limited to certain geographic regions?
So I’m licensed in 48 states. I’m not licensed in Alaska and Hawaii. And Copic, the primary carrier that I work with on the program, they can write in every state. There’s some venues that they choose to not write in, but I do maintain relationships with other carriers. That I can send those accounts to.
And because I know DPC so well, I really push and encourage them to discount the premium as much as possible because of the low, lower exposure. I’m always highlighting patient panel sizes. I’m always highlighting the amount of time that the physicians are spending with their patients,
whether they have hospital privileges or not, but I like when they don’t. And so I really do humbly say a very good job at pushing The factors that reduce the exposure to, and also I’ve been an underwriter before, so I know exactly what they’re looking for.
So I make sure that I highlight the reduced exposure of a physician to make sure that they reduce The premium as much as they possibly can and that all qualifying discounts are extended to the physician. So to answer your question, I can help in 48 of the states. COPIC is pretty much,
I want to say in 42 of the states and the states that they’re not in, I still have other carriers that are in those states. And I explained the DPC model and how it reduces the exposure to those other carriers. Excellent.
And then last question is how much like a percentage wise can a physician, let’s say a typical physician that has no claims history, right? Like how much can they save going from a typical malpractice carrier to you? Yeah.
So we’ve estimated, to be very transparent and honest, each state has different premiums, right? And so a physician in one state may save a lot more than a physician in another state because… And carriers have to file their discounts with all the state’s insurance departments. And so some allow… Discount your percentages to be greater than others.
And so there’s a lot of factors that come into that, but we have seen unestablished practices who have switched from one carrier to us. We’ve seen savings between 30 and 50% sometimes, believe it or not. I mean, it’s pretty interesting how, when a physician doesn’t have what I want to call a DPC expert in the insurance realm,
fighting for them, how much more premium the They may pay because they’re not highlighting the factors that should be highlighted for the maximum discounts to be attached
to that. That makes sense. Excellent.
But so we have seen between, like I said, like 20, 30 to 50% sometimes, sometimes even higher than that, depending on who they were previously insured. Yeah, that’s true. Yeah.
Well, that’s fantastic. I think I’m going to have a longer conversation with you to see if it’s worth changing because there’s a lot more that I know, of course, now compared to when I started. But thank you so much, Sulali, for sharing with us about my DPC insurance. And I think that it’s awesome.
This didn’t really exist when I was Or maybe you were just barely getting started when I was starting. I know that this world of DPC is definitely growing. There are more and more of us each year, and we are looking for ways to be wise with the dollars that we spend on our practice.
And I think because we have such smaller panels and spend more time with people, it doesn’t always make sense to be spending a whole lot on malpractice insurance. So thank you so much for being with us, for sharing. What’s your website? How can people find you if they’re interested?
So my website is mydpcinsurance.com. Very simple. The application is within the website to complete, and I encourage all physicians in all states to complete that application. We’ll utilize that one if you so happen to be in a state That isn’t covered by COPIC. We’ll still utilize that application to send to the other carriers.
That is a DPC specific application asking questions pertaining to DPC practices that we’ve encountered were the most primary questions to Ask for DPC for physicians entering the DPC model or established physicians within the DPC that have a DPC practice. I encourage physicians to always complete the applications as conservatively as possible, especially the ones that are starting off.
There are questions that ask for patient panel sizes, procedures, percentages of exposure for In one area or the other. And so I do always encourage to be as conservative as possible because a policy is an annual policy, right? And so you pretty much want to complete the application for that coming year,
not necessarily for how it’s going to look three to four years from now, right? Because the premium should be for that year’s exposure, not for something that has not yet evolved. To the level of an established practice. So that helps reduce the premium as well significantly. And so the website is mydpcinsurance.com.
The application is there and also a list of items necessary to obtain what I call a solid quote, right? A number that is not going to change with other items that may come in after the fact. It’s just pretty much those items that we need with the application completed to get a solid number.
Yeah. Excellent. All right. Well, thank you again and everyone check out mydpcinsurance.com if you’re interested. Thanks for listening and until next time.
Thank you so much, Marina, for having me. Have a great one.
