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Surgery ‘complication?’ Here’s an option

By John Koenig
10/29/2010 © Health News Florida

Andrew Kagan, the son of a Fort Myers orthopedic surgeon, remembers a malpractice case several years ago against one of his father’s partners. The partner had performed knee replacement surgery on a 60-year-old man. While the surgery itself was successful, a blood clot later formed in the patient’s leg, traveled to his heart, and killed him.

The man’s family sued, but a jury found no fault on the part of the doctor and awarded no money, leaving the family struggling to make ends meet.

Kagan thought there had to be a better way of providing financial protection for patients and their families from the catastrophic risks of surgeries, regardless of whether someone is to blame.

Now, he says he’s offering such protection with a unique creation called complication insurance. The Florida Office of Insurance Regulation gave approval two weeks ago for Kagan’s Jacksonville-based Surgical Risk Solutions, LLC, to begin selling complication insurance policies in the state.

Similar to accidental death and dismemberment insurance, the policies pay in the event of fatality or major debilitating injury – such as paralysis or loss of limb, sight or hearing – resulting from a complication from surgery. The insurance can be purchased by patients prior to undergoing surgery and is effective for 30 days, starting with the date of surgery. Prices in Florida range from $75 for a maximum of benefit of about $90,000 to $320 for a maximum benefit of about $390,000.

The Office of Insurance Regulation confirmed approving the sale of complication-insurance policies but did not respond to other questions from Health News Florida.

Kagan, a 29-year-old lawyer, formed Surgical Risk Solutions in 2008, but didn’t begin issuing policies until early 2010, when sales were approved in Texas by state insurance regulators. Since then, sales by have been approved in 25 other states, including Florida. The carrier for its policies is New York-based, QBE the Americas, part of an international insurance conglomerate.

Before forming Surgical Risk Solutions, Kagan worked as director of strategic planning for Florida Doctors Insurance Company, which provides medical malpractice coverage. His experience in the malpractice insurance business played a part in his decision to develop a new type of insurance product for patients.

Approval of the coverage comes as Florida legislative leaders get ready to possibly renew a long-running political fight about medical-malpractice insurance. Doctors and insurance companies want to limit damages in medical-malpractice cases, while trial lawyers and patient advocates argue that would hurt consumers.

Kagan says the number of medical malpractice lawsuits might decline if patients have an alternative means of financial compensation for adverse results from surgery. Surgical Risk Solutions pays claims regardless of whether there is a finding of fault on the part of the surgical team or facility, though a key requirement is that the complication manifests itself within 30 days of the surgery.

In Florida, the company offers coverage for more than 90 elective surgical procedures. They range from hip and knee replacements, to mastectomies, to inguinal hernia repairs.

Severe adverse conditions, such as loss of a limb or use of a limb from a surgery-related infection, including MRSA, would be covered, Kagan said. Excluded from coverage, however, are higher risk procedures such as heart and brain surgeries.

Pre-existing conditions do not necessarily exclude a patient from coverage. “We’ll take some of the higher-risk patients,” Kagan says. “You have to have three major pre-existing conditions, such as diabetes or a history of heart attacks, before we exclude you.”

Kagan also contends that the coverage is useful for people who already have life and disability-insurance policies. He said most people are underinsured and that Surgical Risk Solutions offers low-cost supplemental coverage.

--John Koenig is an independent journalist in Orlando.