Key Info About The National Practitioner Data Bank

NPDB reports can have a very serious impact on a practitioner’s career. The reports are available to state licensing boards, hospitals, health plans, and other health care entities looking to enter into employment or affiliation relationships with a practitioner. Not only are the reports available to these organizations, but also in some instances entities are required to query this information before hiring and/or engaging a practitioner. Once a report is entered into the database it stays forever. A negative report can lead to a credentialing denial, loss or limitation of licensure or privileges, increases in insurance premiums, and exclusion from health plans. This is often the final piece of a nightmare scenario for any physician facing a medical malpractice claim and/or adverse action licensure or privileges. Despite this reality, many physicians are unaware of several key facets of the statute that could help them avoid the reporting altogether, or at the very least, lessen the damage caused by a report. Below are six key things that every physician should know about all stages of the NPDB reporting process.

The 30-Day Rule

As evidenced by the extensive list above, there is little maneuverability in what must be reported to the NPDB.  When that reporting must occur, however, is a different story. For practitioners facing possible action against their licenses or privileges, the first thing to be aware of is that an adverse action only becomes reportable once it has been in effect for more than 30 days. At that point it becomes reportable regardless of the outcome of any investigation or adjudicative process. While a physician’s natural instinct may be to seek a thorough (slow) investigation of allegations of misconduct, in light of this provision a practitioner may be best served by seeking an expedited investigation and adjudication.  If the issue is resolved in less than 30 days, it will not have to be reported.

Early Resolution

In situations that involve a malpractice suit in addition to/instead of potential adverse action, the 30-day rule does not provide an opportunity to avoid reporting. However, practitioners facing such a situation may still be able to avoid being reported with strategic early action. A medical malpractice payment must be reported to the NPDB only if it is the result of a written complaint or claim demanding monetary payment for damages. In many states, the written complaint clause of this provision has been construed liberally to include even a Notice of Intent To Sue. The rule as currently constructed, however, does not require the reporting of a payment made in the absence of a written claim or demand. This leaves room for a particularly proactive practitioner and/or hospital, in the face of a certain malpractice claim, to avoid reporting by initiating contact with an aggrieved patient and facilitating a payment before pen meets paper in the form of a claim or demand.  It should also be noted that early contact with a patient after a bad outcome, particularly by hospital administration instead of attorneys, could engender positive feelings and eliminate the involvement of plaintiff attorneys, thus making a cost-effective resolution more easily achievable.

The Corporate Shield Loophole

As currently constructed, the medical malpractice reporting statute only requires reporting to the NPDB if a provider is a defendant to the action at the time of the payment. This allows medical providers originally named in a lawsuit to avoid the reporting of a malpractice settlement to the NPDB if he or she is dismissed without the promise of payment before the settlement is finalized. Traditionally this occurs when a practitioner is named alongside his or her hospital or medical group, with whom some type of malpractice coverage is shared. The individual practitioner defendant will obtain dismissal from the case prior to settlement, leaving only a hospital or group medical practice in the case to settle the plaintiff’s claims. This has become known as the corporate shield loophole. Practitioners named as defendants in a lawsuit alongside their hospital or another corporate entity should work with the other parties involved in the suit to negotiate a dismissal before payment as any part of the settlement. And the resulting settlement agreement should make no mention of the individual practitioner or that any money is being paid on his or her behalf, thus not creating any reporting obligations.

Using Personal Funds

In instances where a physician is named individually in a lawsuit and the relationship between the defendants prevents the use of the corporate shield loophole, using personal funds is another option to avoid reporting. As noted above payment, on behalf of a physician by another party is a reportable action. Payment made by an individual physician on his or her own behalf, however, is not reportable. Practitioners should consider settling claims, particularly low dollar amount claims, with their own money to avoid reporting. In some instances, taking out a personal loan and using the money to settle a claim may be a better alternative than having one’s name reported to the data bank where it will reside forever, potentially effecting future employment, compensation, and/or insurance premiums.

1 view
  • Black LinkedIn Icon
  • Black YouTube Icon