Chapter 6: How to Keep Your Insurance Rates Low
Carrying adequate (and appropriate) business insurance is one of the foremost ways to protect your medical practice, but it's not the only way. Some of the following tips can help lower your premium rates, and all of these pointers can strengthen your overall business protection plan and keep your healthcare business thriving:
- Maintain patient confidentiality. As we discussed in the section on HIPAA compliance, guarding your patients' protected health information is your responsibility. Even unintentional breaches can be penalized, and repeat offenses can cost thousands of dollars in fines. To minimize the risk of compromising your patient's privacy, create protocols for handling protected health information. If you eventually hire staff members, they'll also need to undergo HIPAA-specific confidentiality training.
- Lower data breach risk. You can potentially reduce your Cyber Liability Insurance premiums by reinforcing your security practices (which also reduces your risk of data breaches!). The easiest way to begin protecting digital information is with strong passwords. According to a Verizon's 2012 Data Breach Investigations Report [PDF] , 79 percent of breach victims were targets of opportunity, and 96 percent of the attacks were not difficult for hackers. That means vulnerabilities were exploited, and most often, weak passwords were the culprit. Choosing complex passwords and changing them often can reduce your risk exposure. You'll also want to conduct regular risk assessments to reveal hardware, software, and site exposures. Plus, implementing firewalls, virtual private networks (VPNs), and anti-virus software can help prevent an attack from occurring.
- Encourage your patients to speak up. Earlier, we looked at the common risks health professionals face, and one of those risks involves informed consent. If your patient doesn't understand what they're agreeing to when you discuss their treatment options, they can't make an informed decision. Should you proceed to treat them without their full consent (and a signed informed consent document), they could take you to court over the issue. As a result, you could face hefty malpractice penalties — or even criminal assault charges. Though there's no telling what a patient may or may not do in response to a medical misstep, which is why communication lines must be open at all times. Answer their questions, get patient feedback, encourage them to talk about their medical history, and let them know that their involvement can influence the success of their treatment. Chances are, the more involved in the process your patient is and the more they understand the pros, cons, and costs of their treatment, the less inclined they'll be to take legal action against your practice if things don't go as you'd hoped.
- Comply with the Affordable Care Act . You don't receive healthcare benefits from your employer because you work for yourself. However, as of January 1, 2014, all Americans are legally required to carry health coverage. Thankfully, you can no longer be barred from coverage based on preexisting conditions (such as pregnancy or disability). If you don't have coverage by January 1, 2014, you'll be charged a fee of 1% of your yearly income or $95 per person for the year (whichever is higher). The fee increases every year that you don't have coverage. Even if you're covered by your Workers' Compensation policy, it doesn't count as healthcare coverage and you will still be charged a noncompliance fee.
- Pay your quarterly taxes . If you're an independent contractor or sole proprietor, you also don't have an employer to withhold your federal taxes (i.e., your Social Security and Medicare taxes). That means you are subject to paying quarterly taxes. (Note: most states also require the self-employed to pay quarterly income taxes.) If you fail to pay your quarterly taxes at the designated times throughout the year (April, June, September, and January), you will owe back taxes, plus penalties and interest (if you owe more than $1,000 at the time you file your annual taxes). To submit your payments to the IRS, you must file Form 1040-ES vouchers, or use the Electronic Federal Tax Payment System . The IRS prefers that you figure the total estimated tax for the entire year, divide the amount by four, and send in equal payments according to the schedule. The Form 1040-ES package comes with a worksheet that will help you work up the amount you owe.
79% of data breaches are crimes of opportunity.
Next: Chapter 7: When to Update Your Business Insurance Policies