When you run a Residential Care Facility for the Elderly (RCFE), you want to provide your residents with what they need. That doesn’t mean that you can do it all, though. Third-party providers can help you give access to the required care without overextending your payroll — or overexposing yourself from a liability perspective.
Still, just because they operate as an entity outside of your RCFE doesn’t mean they’re risk-free when they visit. If a resident slips during a physical therapy session or a doctor recommends a medication that causes a side effect, there’s a world where you can get pulled in.
Third-party medical and mental health professionals can be an excellent resource, but they come with some risk. Let’s explore what RCFE owners and managers need to know here.
The insurance risk of third-party providers
The benefit of a third-party doctor, physical therapist, mental health therapist, or any other care provider is separation. Because this person operates on their own, they should have their own business entity and their own insurance. And because they don’t act directly on behalf of your facility, it limits your liability exposure.
That doesn’t mean you’re totally without risk here, though.
If you host medical professionals or therapists, you could still be held liable for their actions. If residents or their family thought that person was part of facility staff, they can argue that you have vicarious liability.
You can also get into problems for what’s perceived as a negligent referral.
On top of this, even if you’ve contracted out services like physical therapy, you still need to provide safe spaces for that care to happen.
In short, hiring third-party providers does often protect you from being directly responsible for their actions. But that doesn’t mean they’re completely risk-free.
Protecting your RCFE while working with third-party professionals
To protect your facility, two measures go a long way. First, make sure it’s abundantly clear that the professionals you bring in are external experts. Residents have the option to use them, but you’re not recommending them. You’re merely making their care available in an effort to provide a benefit to your residents.
Secondly, make sure those third-party providers have their own insurance. If they aren’t on your payroll but they’re coming to your facility, you want to make sure they have their own protections in place. This prevents residents and their families from going after you (claiming something like vicarious liability) if an incident occurs.
Specifically, RCFEs who host third-party care providers should:
- Require certificates of insurance (COIs) and keep them on file
- Require professional liability coverage
- Review that COI to make sure policy limits are adequate (you typically want to see at least $1 million in coverage)
File COIs with the written, signed agreement you have in place with the third-party provider. That should clearly outline the services they’ll provide and include indemnification clauses that protect you.
Getting the required protections in place helps you host third-party providers with confidence. And that means you can offer your residents a more robust spectrum of care. The key is making sure you’re set up for success here.
We can help. As specialists in mitigating liability for RCFEs, our team at InsureMyRCFE can review third-party providers’ insurance and your agreement with them to look for gaps. We can also make sure your own policies provide the safeguards you need. Contact us at (805) 413-5668 today.
