Regulatory Study: Bridging the Liability Gap for Community Healthcare Providers in Carceral Settings

Transitional healthcare at the end of an incarceration period can be a vital determinant of an individual’s successful return to the community. There is evidence that community healthcare providers (CHPs), providers that practice in the communities to which the individuals will return, can provide better outcomes than carceral-based practitioners. However, in Washington State, as in many other states, these providers face a significant barrier: obtaining medical professional liability insurance for care delivered in prisons and jails. Davies was engaged by the Washington State Office of the Insurance Commissioner to study the availability and affordability of medical professional liability insurance for CHPs providing transitional services in carceral settings, and to provide policy options to the Washington State Legislature to enhance availability and affordability.

The Promise of Community‐Based Transitional Care

Studies have shown that when incarcerated individuals begin receiving care from the CHPs who will continue their treatment post‐release, their health outcomes improve substantially. By integrating CHPs into the last 90 days of incarceration, the providers can reduce treatment disruptions and foster trust in the healthcare relationship—factors that collectively lower the risk of complications, readmission, and recidivism.

Recognizing this, the Washington State Health Care Authority (HCA) applied to the Centers for Medicare & Medicaid Services (CMS) to allow Medicaid funds to reimburse CHPs for transitional services up to three months before release. This initiative aligns incentives for providers, patients, and payers, but it only works if CHPs can secure professional liability coverage to practice in carceral environments.

The Insurance Barrier

Despite stakeholder enthusiasm—including from jail supervisors eager to tap into the CHP relationship prior to release—CHP providers are often unable to obtain professional liability insurance for work inside prisons and jails. This problem is not restricted to CHPs but is a wide-ranging problem for many medical practitioners when seeking to perform work in carceral settings countrywide.  Medical professional liability insurance is a contractual requirement for the practice of medicine in many prisons and jails. It also benefits all stakeholders, including any individual who is injured by an error or omission.

Insurers view carceral settings as high‐risk due to a number of factors, including but not limited to:

• Pre-existing medical conditions for many incarcerated individuals
• Carceral-setting-specific complications related to care
• Potential for entanglement of Eighth Amendment claims against the municipality, county, or state with pure medical professional liability claims against the practitioner
• Reinsurer reluctance to assume claims related to carceral settings

Without professional liability coverage insuring them for services in carceral settings, CHPs are effectively unable to practice, incarcerated individuals without this benefit.

Our Research Approach

To conduct our research and develop policy options, our team undertook a multi‐pronged investigation:

1. Conducted interviews with insurers to map the medical malpractice landscape in Washington and compare appetites for carceral exposures across states.
2. Surveyed correctional health directors to understand how prisons and jails currently insure in‐house medical staff.
3. Analyzed operational models of care delivery inside facilities, including medical employees, contracted practitioners, off-site medicine, and telehealth/telemedicine providers.
4. Reviewed historical malpractice claims arising in various carceral settings and, to the extent possible, considered their overlap with constitutional Eighth Amendment lawsuits.
5. Examined datasets provided by state, county, and municipal partners on claim frequency, severity, and resolution.

By synthesizing insurer feedback, facility practices, and claims data, we identified key drivers of underwriting reluctance and potential levers for policy intervention.

Policy Options for Regulators

Drawing on our findings, we proposed a number of policy options for consideration by the Washington legislature.

1. Gather more detailed data on malpractice exposures in carceral settings, improving risk quantification and underwriting accuracy.
2. Establish a Joint Underwriting Association (JUA) or other insurance mechanism dedicated to providing medical professional liability insurance to CHPs for services provided in prisons and jails.
3. Extend state liability protection to cover CHPs delivering transitional care, contingent on providers meeting defined certification and training standards tailored to carceral health.

Each option carries advantages and challenges. Enhanced data collection lays the groundwork for actuarial precision but requires investment in standardized reporting, and confidentiality must be maintained. A dedicated insurance mechanism can facilitate insurance availability yet demands initial capital and governance and may require assessments of the voluntary market should loss experience exceed premiums. Extending liability protection to CHPs must be balanced against the state’s fiscal risk and the need for robust quality controls.

Conclusion

Community‐based healthcare transitions have been proven to provide better outcomes among people leaving incarceration. Clearing the malpractice insurance hurdle is the next critical step to ensure that CHPs are able to bring their expertise into carceral settings, ultimately benefiting individuals, correctional systems, and the broader community alike.

If your organization is navigating similar regulatory or market complexities, our team is here to help. Reach out to Davies’ actuarial experts to discuss how our insights can support your goals.

Read our report: Market Study – Approaches to Increase the Availability of Medical Malpractice Insurance for Community-Based Healthcare Providers in Washington State Carceral Settings