Ex-Steward Clinicians Face Malpractice Bills as Insurer TRACO Fails
More than 300 former doctors and nurses are pressing the Healey administration for a state-backed relief fund and a criminal investigation.
· 1 min read
Former Steward Health Care doctors and nurses in Massachusetts are being held personally liable for malpractice claims after the collapse of the chain's in-house insurer, TRACO, The Boston Globe reported on October 13.
TRACO, a captive insurer Steward moved from the Cayman Islands to Panama in 2019, had about $3.5 million in cash by mid-2024 while facing more than 500 malpractice claims, according to the Globe. The insurer once covered 1,400 practitioners nationwide. Massachusetts regulators said they had no authority over the company because foreign-based captive insurers are not required to be licensed in the state.
In two Massachusetts Superior Court cases, judges have ordered former Steward physicians to personally pay six-figure settlements that TRACO negotiated but did not fund. Quotes for "tail" policies covering past claims have risen sharply, topping $100,000 a year in some specialties.
Of the systems that bought Steward's Massachusetts hospitals in the fall of 2024, only Brown University Health has agreed to cover past claims. Boston Medical Center Health System said it would do so only if TRACO is declared insolvent; Merrimack Health declined.
More than 300 former clinicians, backed by the Massachusetts Medical Society, are lobbying Governor Maura Healey's administration for a relief fund, tighter insurance oversight and a criminal investigation of Steward's former executives. Healey's health office said it is reviewing the proposals.
This story was first reported by The Boston Globe.
Comments