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  • Paying for own tail coverage

    I am in talks with a private practice (would prefer not to say which state) and the initial one year contract offering states that I am responsible for paying tail coverage if/when I leave the practice. In doing some reading, it seems like this is not standard in medical specialties. An attorney is reviewing the contract over the next few days, but if the practice refuses to budge on this issue, any idea how much this will run or how I would find out? Is it normal for a private practice to have this arrangement?

  • #2
    This is fairly common. You might want to negotiate that if you are terminated without cause (the practice just fires you), that they pay for the tail coverage and if you are terminated for cause (you did something wrong), you pay for the tail coverage.

    The best thing to do is speak with a malpractice insurance broker to determine what the approximate cost of the tail coverage would be in the event you need to purchase it. You may then be able to use it as a way to increase your salary or have leverage to obtain other benefits you desire.

    Of course, if you are dealing with a Healthcare attorney, they will be very familiar with how to best negotiate things on your behalf or give you the language to use so you can do it on your own.

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    • #3
      It is very common.  I would estimate about $25,000.  It depends on your policy limits and company and specialty, obviously.

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      • #4
        I did exactly as Larry says.  Negotiated that they pay X amount for tail if fired without cause.  In thinking about it now though I figure "cause" is relatively easy to find.  I can imagine some hospitals for instance where being a "disruptive" physician is rather nebulous..

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        • #5




          I did exactly as Larry says.  Negotiated that they pay X amount for tail if fired without cause.  In thinking about it now though I figure “cause” is relatively easy to find.  I can imagine some hospitals for instance where being a “disruptive” physician is rather nebulous..
          Click to expand...


          This was the way mine was written. If I left, I paid. If they fired me, they paid. My quote for a fully mature tail was $55K, about 3 times the yearly premium. Now, thankfully, we're on an occurrence policy that is even cheaper than the claims made one we had previously.

          I would not sign a contract that specified I was responsible for the tail if they decided they didn't like me.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            Thank you all for your help. I will be talking with the potential employer shortly and get his thoughts on many of the above options - splitting 50/50 or having the employer pay if I am dismissed without cause. I am going to look into a few companies and get a rough idea of pricing as well.

            I obviously would much prefer an occurrence policy, but I doubt I will be able to convince the employer to do this as the whole practice has had claims based for quite some time.

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            • #7
              Our private practice has the same written into our contracts, but in practice, it has never been an issue.

              1) If you retire, the tail is covered.

              2) If you move to another group, they generally will cover the "nose". (The University is self-insured and usually does not pay the nose, but this is negotiable)

              3) When we have, er, encouraged people to move on, we have paid the tail.

               

              In our specialty, it has been about $20k, which relative to our salary and the likelihood of the radiologist paying the tail, ends up being a minor issue. We are considering removing this from our contracts, perhaps with the exception of when a colleague leaves to join another group--why should we pay to help you join the competitor?

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              • #8




                Thank you all for your help. I will be talking with the potential employer shortly and get his thoughts on many of the above options – splitting 50/50 or having the employer pay if I am dismissed without cause. I am going to look into a few companies and get a rough idea of pricing as well.

                I obviously would much prefer an occurrence policy, but I doubt I will be able to convince the employer to do this as the whole practice has had claims based for quite some time.
                Click to expand...


                I would go further. I would try to get them to pay if they fire you for cause.
                Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                • #9
                  I was the employer and I ended up paying for his  tail coverage. It never occured to me, because you offer a good opportunity and with great benefits, that  it does not get you loyalty.

                   

                  The lesson here is that if you get your employer to pay you for firing you for cause, they are patsies and do you want to work for patsies?

                   

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