Administrative Defense Coverage

What does Administrative Defense Coverage mean?

Administrative defense coverage is medical insurance coverage purchased by surgeons and physicians to cover the legal costs for defending administrative disciplinary actions by state licensing boards, managed care organizations, hospitals, and peer reviews. It can also cover the costs of investigations involving billing and coding practices. Doctors may also have to participate in investigations by federal and state government agencies and can use their administrative defense coverage to pay for these actions which can be very expensive. In general, administrative defense coverage is used to combat any legal action which can impact a doctor's practice.

For example, a doctor who has to prepare a legal defense for an administrative or governmental billing and coding error action can use their administrative defense coverage to pay for this expense. Or, if a nurse is under investigation due to a complaint and an administrative action is opened, if the nurse has purchased administrative defense coverage the nurse may receive compensation for her out-of-pocket expenses (travel, postage, etc.) that she incurs, as well as lost wages because of working time missed for hearings and depositions. A policy for a nurse may be between $10,000 and $15,000 and will usually be sufficient to provide for most of the legal fees and costs involved in defense of such a case.

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