RISK SOLUTIONS

Sexual abuse claims: Don’t assume they can’t happen

Healthcare organizations have in the past taken an insular approach to warning signs and emerging risks among members of their own staff. Leadership may overlook or downplay concerns raised by colleagues about a problematic employee. Prominent physicians may escape scrutiny by virtue of the influence they wield within a healthcare organization.

Any organization faces the possibility of employing someone who goes on to commit misconduct. Given the vulnerability that patients face while receiving care, allegations of sexual abuse and misconduct can financially and reputationally cripple healthcare organizations.

Recent cases highlight why healthcare organizations should resist the temptation to circle the wagons when signs of misconduct by a physician emerge and instead take a proactive approach to managing these risks.

Columbia University in New York has entered into settlements exceeding $1 billion with more than 1,000 former patients of gynecologist Robert Hadden.

Hadden had worked at Columbia University’s Irving Medical Center and New York Presbyterian for two decades.

The two institutions hired a law firm to investigate how Hadden could have preyed on his patients for so long.

The report, issued in March, pointed to several contributing factors. Among them:

Patients and employees who knew of Hadden’s abuse believed they could not report his behavior because the institutions would not believe them or they could be retaliated against.

Columbia lacked reporting channels and policies for handling patient complaints.

Poor record-keeping.

The insurance implications of abuse claims

Healthcare organizations face a growing risk of sexual abuse and misconduct accusations as shifting societal attitudes have led to more open discussions about sexual abuse. Medical liability rates, particularly for policies that cover sexual abuse and misconduct, have increased while coverage has narrowed.

Acadia Healthcare, which entered into a $400 million settlement to resolve allegations of sexual and physical abuse in a children’s residential treatment facility in New Mexico, last year acknowledged that its commercial insurance coverage had less favorable terms than before. In a filing with the Securities and Exchange Commission, Acadia Healthcare noted that its insurance program excluded incidents involving sexual molestation or abuse while charging higher premiums.

Carriers are responding to healthcare sexual abuse and misconduct risks by tightening language in policies and requiring co-participation by insureds, as well as higher retentions.

Healthcare organizations seeking coverage for sexual abuse and misconduct should take a proactive approach to demonstrating to underwriters that they have robust and meaningful risk mitigation measures in place. They must also prepare to articulate, with supporting data, how risk mitigation initiatives have worked in the past.

Underwriters will take a close look at an organization’s policies. For example, practices that involve sensitive patient exams should have a policy specifying when a chaperone must be present with the patient and clinician during such exams. Some organizations allow patients to opt in to having a chaperone, while others provide a chaperone unless the patient declines one. Some practices require a chaperone for an exam to occur. Some underwriters are placing greater scrutiny on ensuring chaperones are clinically trained and understand the scope of sensitive exams. In all instances, informed consent should be given, and the patient’s decision should be documented.

Healthcare organizations can no longer act as though allegations of sexual abuse and misconduct cannot occur within their walls. Instead, these organizations can and should take proactive measures to mitigate the risk of such allegations occurring. Overlooking the possibility poses the risk of long-term harm to patients and a ruinous financial and reputational threat to a healthcare organization.