American Medical Risk Insurance Company (AMRIC) was formed to develop “Adverse Event Insurance” (“AEI”).  AEI provides compensation to patients who suffer injury as a result of medical treatment without regard to the fault of the medical provider.  Claims are based upon the “avoidability” of an adverse event rather than negligence of the medical providers. The coverage provides scheduled benefits for hospitalization, temporary disability, permanent disability and death without the tremendous expense of malpractice litigation.

AEI will be distributed through group health plans as part of member benefits. The annual premium for the basic program is very affordable at around $50 per member, which provides benefits up to $50,000.  The benefits can be customized based upon level of premium. The product is fully developed and will be launched in to the market during the next few months.

In addition to providing direct benefits to injured patients, AEI coverage will improve patient safety and help reduce malpractice claims by providing patients an alternative source of compensation. Medical providers, patients, health networks and group health insurers will all benefit from this innovative product. Medical providers should encourage group health plans to provide the coverage and eventually offer discounts to those that do. As medical providers feel less threatened by malpractice claims, they will practice less defensive medicine, which will significantly reduce the overall cost of health care. Group health plans and their members will benefit from this savings.